Social investment bank could "drown" other players, warns Hayday

Finance | Vibeka Mair | 2 Sep 2009

Malcolm Hayday, chief executive of Charity Bank has warned that the proposed Social Investment Wholesale Bank could have the effect of “turning on the tap to seedlings and seeing them all just drown”.

The government is currently consulting on the form and function of a proposed Social Investment Wholesale Bank (SIWB). The consultation document makes clear that the SIWB will not lend to frontline service delivery charities, but to those intermediaries that already inhabit the retail social investment market – like Charity Bank.

However, Hayday (pictured) told Charity News Alert that he is concerned that the bank could have consequences for all other actors in the market.

“At this stage in market development it is very difficult to see a financially sustainable institution that will be able to sustain itself solely on wholesale intervention.

“Therefore it would seek other income-generating activities which would either mean lending itself or taking fee income activity.

“I question that unless it is really big even then it will be quite modest in comparison with the commercial banks. Then, you’d be much better off putting the money into Charity Bank, New Philanthropy Capital, Social Finance, Venturesome, the Impetus Trust or the sustainable funding project within NCVO.

“Then the money would create much more impact and added value than a small amount of money going into a wholesale investment bank.”

For more views from other banks in the social investment market see our special feature.

Who's Who: Vibeka Mair

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