Only one in ten youth charities and social enterprises say they are ready for social investment at present, however one in five youth organisations expect to receive up to five per cent of their income from social finance in three years, according to a report.

The report, Growing Interest, surveyed 97 managers in youth sector charities and social enterprises. While only ten per cent of these organisations feel investment-ready, some 20 per cent expect to get some income from social investment in the next three years.

The report says that if this applied to the sector as a whole, it would mean £5m of social finance invested in the youth sector in the next three years.

It also found that nearly three-quarters of these organisations had experienced a drop in income in the last 12 months.

The report concludes that there is a strong interest and openness to social finance within the youth sector. However, for the social finance already available to the sector, existing providers only cater to a limited proportion of the youth sector market.

It argues that the challenge is less about the amount of social finance for the sector, than they types of finance it offer.

The report was produced by the Young Foundation and the National Council for Voluntary Youth Services for the Catalyst consortium, which is aiming to strengthen the youth sector market over the next two years.