Co-operative & Community Finance has been operating for almost 40 years, and today is one of the most successful – and sustainable – CDFIs in the UK. Formally known as ICOF (Industrial Common Ownership Finance) was born out of a series of informal meetings in Northampton inspired by the principles and practice of one of the largest common ownership co-operatives in the UK – Scott Bader.
The idea was to encourage successful common ownerships to lend money to ICOF which would then be lent on to new co-operative ventures – a revolving loan fund, to which money is repaid and lent again.
Donations, deposits and loans were ICOF’s source of capital as the banks would not take the risk of lending to employee owners.By the end of 1976 £60,000 had been lent to a total of 14 co-ops. It became clear in the early 1980s that there was a growing need for a new national loan fund alongside the developing local authority funds.
ICOF plc was formed in 1987 as a subsidiary of ICOF Ltd with the specific purpose of raising capital by public share issue to lend to worker co-operatives and employee buyouts. Preference shares were offered, redeemable after 10 years, and £550,000 were purchased. This was both a successful and a pioneering approach to ethical investment. It was also innovative in that it spread shareholders’ money across a wide portfolio of loans to reduce risk to the investor.
In 1997 the investors had the opportunity to redeem their 10 year preference shares but most opted to transfer to the new issue launched in June. The second plc issue boosted the funds to over £1 million with many new investors attracted to ICOF.