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East London social enterprise secures £1m investment from two big banks

6 April 2011

'This financing is the first commerical microfinance deal in Western Europe and it will help bring long term sustainable finance to tackling this deep rooted social problem.'

 

Fair Finance managing director Faisel Rahman

The east London based social enterprise Fair Finance today signed a deal with the banks Societe Generale and BNP Paribas for a £1m microfinance package which is being dubbed the first of its kind in Western Europe.

Both banks are putting in equal ammounts to help Fair Finance expand its personal lending service which provides an affordable alternative to pay day lenders and money sharks and to also expand it's seed capital fund for entrepreneurs in poor communities.

MD of Fair Finance Faisel Rahman said: 'Over the last few years Fair Finance has shown how a social business can be a real alternative to lenders charging upwards of 400 per cent.

'This financing is the first commerical microfinance deal in Western Europe and it will help bring long term sustainable finance to tackling this deep rooted social problem.'

Chief country officer for Societe Generale in the UK Ian Fisher said: 'We understood very quickly Fair Finance would always be constrained if relying solely on grants and donations. We therefore wanted to make a genuine commitment to support a sustainable business model.'

UK CEO of BNP Paribas Ludovic de Montille said: 'We felt it was important to make a contribution to solving the financial and social problems that we see around us.'

Fair Finance's clients typically have no or bad credit history and many not even have bank accounts. It cuts down the interest its clients owe on repayments by around 90 per cent when compared to a typical doorstep lender who can charge interest at rates of 425 per cent.

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