Danyal Sattar – Interview


sis in Scandinavia that led to an upsurge of interest in co-operative JAK, which stands for Jord Abete Kapital (Land Labour Capital). They were making mort- gages affordable by lending money at zero interest. The interest in those schemes really grew. In recession after recession, there has always been a surge of interest in social investing. Be it in


Ecology Building


Charities and social enterprises are needed now more than they have ever been.”


Reserves will be exhausted, so I expect we will see what we usually see in a recession that just when things are starting to look brighter companies go bust. They have exhausted their resources just to stay alive and do not have the liquidity to get back trading again. In our sector, the furlough scheme has been widely used. It has been fantastic for charities and social enterprises just as it has for the commercial sector. With the one caveat, that at the time when our ser- vices are needed more than ever with our charities providing mental health support to people, if you have to furlough your staff because donations have fallen then you are less able to provide the support people need.


If you are furloughed, you are not able to work, which for a charity or social enter- prise is a real issue, but it has led to peo- ple staying in employment and that is a very good thing. We are also seeing a strong take up by charities and social enterprises of the bounce back business loans. The speed and simplicity of that government-backed scheme delivered by mainstream banks has been helpful from what we can see at


this early stage. We participate in the Cor- onavirus Business Interruption Loans Scheme. We do that through a consortium with Social Investment Business, Big Society Capital, Social and Sustainable Capital and Charity Bank. This group is providing Corona business interruption loans to charities and social enterprises right now, so that has been something positive we have been able to do.


With unemployment rising, will there be a greater demand for the services provided by organisations such as Big Issue Invest in a post-Covid world? There is good news and bad news. The bad news is that we are anticipating the economy will be in a difficult state. I don’t envy the decisions that the government are having to make. This is an extraordi- nary time. We all thought the global financial crisis was extraordinary. This is another step further out. We are anticipating a deep slowdown and recession after this. In times such as these, there tends to be a real interest in putting money into something with a social purpose.


Back in the 1990s there was a banking cri-


Society or Triodos Bank or more risk- based lenders such as ourselves. Two things happen. People want to give something back; they want to do some- thing positive with their money. The second point is that they want to see where their money is going. The financial services industry that we operate in can be disintermediated and opaque as to where the investors’ money is going. There is a real simplicity in what we do. We publish a list of the people we invest in. You can clearly see what we do and how we do it. It’s pretty simple stuff. We raise money and reinvest it. People like the transparency and connection that they get with social investment. So post-recession there tends to be an interest in this as there is a need for it. We are going to have to do things we have not done on that scale before around training people to get them back into employment. After the global financial crisis, we avoided the worst of the recession through the gig economy and not having an increase in real wages. Back then we had a focus on people not being in education, employment or training. But we are going to have a wave of re-skill- ing work to do around employment in a way that has not happened for 15 or 20 years. It will be different from what we have done in the past, but the demand will be there for our services. It would be great if it wasn’t. We could all put our feet up and go off to some desert island, but charities and social enterprises are needed now more than they have ever been.


Issue 94 | July 2020 | portfolio institutional | 19


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