Unity Trust sets its sights on becoming the bank for the social economy

As it celebrates its 30th anniversary, Unity Trust Bank continues to focus on increased lending to social economy organisations. The bank, which describes itself as a specialist bank...

As it celebrates its 30th anniversary, Unity Trust Bank continues to focus on increased lending to social economy organisations.

The bank, which describes itself as a specialist bank for civil society, as well as social businesses such as co-operatives, is looking to further embed its operations within the social economy.

It has pledged to invest £100 million in the sector over three years, from 2013 to 2015, and is seeking to grow its lending activity throughout all regions of the UK.

In addition, it is set manage changes to it business model following the Co-operative Bank’s announcement of its intention to sell its 27% shareholding in the bank.

Unity, which first opened its doors on May Day in 1984, was founded by trade unions, which still collectively own the majority of the bank.

Richard Wilcox, Unity’s chief executive, said: “Unity is looking to grow its business and affirm itself as the bank for the social economy, particularly co-operatives. Unity has already granted loans to some worker, housing and renewable energy co-ops, credit unions and community pubs.”

Richard Wilcox, Unity’s chief executive
Richard Wilcox, Unity’s chief executive

However, growing awareness about the bank remains a priority. “While we continue to see an increased interest in the bank as a result of a growing awareness of our social values and our commitment to invest in organisations at the forefront of delivering social change, I don’t think enough people know about us. Outside quite a small circle, Unity is not a well-known name. When people do know us they like us, but not enough people know us,” explained Mr Wilcox.

In an effort to reach out to the co-operative sector, the organisation is this year’s sponsor of Co-operative Congress, which takes place on 28 June in Birmingham. Said Mr Wilcox: “Our challenge and part of the reason we are sponsoring the Congress is to get more people to know about us. We are big supporters of co-ops and share the same values and want to see these innovative businesses flourish.”

Mr Wilcox thinks new legislation on community shares and increasing the withdrawable share capital allowance will benefit a number of co-operatives. “Generally there have been a lot of small co-ops or big co-ops and not much in between. Those growing in the middle will need access to specialised finance,” he said.

“As a bank we operate on a strict double bottom-line principle where everything we do has to have some social value attached and that resonates across the co-operative movement as well.”

Every customer obtaining a loan from Unity has to have demonstrable social and community output. Unity’s social lending impact report published this year revealed that the bank has more than doubled its lending to social economy organisations, many of these being co-operatives.

Over the years, Unity has focused on organisations in the social economy outside the co-operative movement, but its involvement with co-operatives has increased in the past six months. In April, Unity received around 50 new enquiries from the co-operative sector.

In spite of its aspirations to expand, Unity “will only ever be a niche bank”, says Mr Wilcox.

“However, we are proud to be supporting inspirational organisations and by developing and gaining expertise in various areas, the bank will continue to grow as a specialist niche provider for the social economy sector,” he added.

Mr Wilcox joined Unity in 1988, leaving in 1994 for the Co-operative Bank and returning in 2012. During his time at the Co-operative Bank, he developed the social banking unit, which had responsibility for co-ops, renewable energy and micro finance.

“We never want to grow away from our roots. If we’re not tied to our mission than there’s no point in us being here. We’re proud to be the only bank that focuses entirely on the social economy,” he said.

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