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Black-led social enterprises ‘face additional questions, additional due diligence and risk aversion’ says Global Social Entrepreneur, Stephen Bediako OBE

By January 26, 2022No Comments

Global Social Entrepreneur, Stephen Bediako OBE, has contributed to a new report looking at how the social investment market can support the growth of social enterprises. His comments support the report – ‘Reclaiming the Future: Reforming Social Investment for the Next Decade’ – and its findings that the experience of Black social entrepreneurs is a ‘complex’ one, with multi-layered barriers limiting access to resources and funding.

Stephen  Bediako,  Director  of  The  Social  Innovation  Partnership,  told  the Commission  that  he  had to face  “additional  questions,  additional  due  diligence and  risk  aversion”  in  his  attempts  to  access  investment. The report was produced by The Independent Commission of Social Investment, which was launched in February 2020 by Lord Victor Adebowale CBE and supported by national social enterprise, Fusion 21.

It finds that structurally ‘social investment continues to have a serious problem with inclusion and equality particularly, although not exclusively, in relation to race.’ It also finds that the structure of the social investment market was at the root of these problems, particularly the lack of patient, concessionary capital for lending to social enterprises and the lack of flexibility in the structure of key institutions within the social investment market, such as Big Society Capital. What becomes clear from the report is that social enterprises in the regions and nations of the United Kingdom have been underserved by social investment as have disadvantaged groups, such as Black-led social enterprises.

These structural weaknesses have led to a lack of diversity in the financial products available to social enterprises, particularly a lack of “enterprise-centric finance”, which the Commission has defined as investment which is built around the needs of social enterprises with flexible repayment terms rather than conventional debt products.

The Commission highlights a major opportunity for economic and jobs growth and presents seven key recommendations for the sector. They include a new £50m “Black-led” social investment fund to tackle the current inequality of social investment in Black-led social enterprises.

Its recommendations could see 5,000 social enterprises grow, creating 180,000 jobs either directly or indirectly, with 36,000 jobs in our most deprived communities, adding £3bn to the UK economy and injecting over £600m into the poorest parts of the UK.

Stephen, who is the founder of multiple social enterprise-led organisations including The Social Innovation Project (TSIP) and US-based Path Group and Turning Basin Labs said:

I welcome this report from the Commission. For a long time I’ve been arguing for a enterprise-centric approach to developing mechanisms for social investment. The report is tough reading – especially for colleagues at BSC who have done a good job in attracting more finance into the sector and who can do more to facilitate and catalyse the change we need. However, it marks a window of opportunity to reimagine and take social investment to the next stage of evolution in the UK. I welcome the Reports recommendations and I am excited by the Reports recommendations and look forward to working with the Commission, Big Society Capital and other partners to bring them into reality. I am especially excited by a dedicated fund for black and BaME Led enterprises – this could be the kickstart we need to create more social impact and value in the U.K.

Lord Victor Adebowale CBE, Chair of the Commission on Social Investment, said: 

“This is a long report, but the core message is a short and simple one. We need the social investment market to get back on track by putting the needs of social enterprises at the centre of everything it does.” 

“Our report does not look to assign blame to any particular individual or organisation. We believe that the problems are essentially structural, but we must learn the lessons of what has and has not worked over the past decade. If we can make the structural changes outlined in this report, I believe we can make social investment work for social enterprises and, most importantly, enable them to create the jobs and opportunities which our country desperately needs.” 

“I hope that government, social enterprises, social investors and all stakeholders will come together to refocus the social investment market and implement these recommendations.” 

Although interrupted by COVID-19, the Commission engaged with over 300 social enterprises, taken over twenty hours of recorded evidence, and held sixteen engagement sessions with social enterprises, policy workshops and public witness sessions leading to this report.



To reform the social investment market, the Commission has recommended: 

  1. HM Government should develop a new UK-wide social investment strategy, in consultation with the devolved administrations, to provide renewed clarity and purpose to the social investment market which has been underpinned by nearly £1bn in public investment. 
  2. A new £400m ‘Frontiers Fund’ should be given to a reformed Big Society Capital, which should have its financial sustainability target removed, to provide enterprise-centric finance to social enterprises.  
  3. An additional £100m investment in Access – The Foundation for Social Investment, to ensure the ongoing provision of blended finance to social enterprises. 
  4. A new “Flexible Capital Taskforce” to work with charitable foundations to boost their investment in social enterprises and unlock £380m of new capital by 2030. 
  5. A new £50m “Black-led” social investment fund to tackle the current inequality of social investment in Black-led social enterprises. 
  6. A new “Social Enterprise Loan Guarantee” scheme to provide security to investors in long term patient capital for social enterprises backed with £200m of public money.
  7. Regular investment in place-led social enterprise infrastructure to support the growth and development of social enterprises that can access social investment. An initial investment of £44m should be made from dormant assets with further tranches in the future.

·      The Commission on Social Investment (also known as the Adebowale Commission) was set up in February 2020 to “investigate the current state of the social investment market and how the market could better enable the growth of social enterprises.”

·      For the purposes of this Commission, “social investment” means any form of repayable finance (unsecured loan, mortgage, bond, repayable grant etc.) or equity that is given to or invested into social enterprises.

·      The Commission on Social Investment was made up of five independent Commissioners, chaired by Lord Victor, with a Secretariat provided by Social Enterprise UK. The Commission was supported by Fusion21, the national social enterprise.

·      The Commissioners were: 

·      Lord Victor Adebowale CBE, Chair

·      Dr. Susan Aktemel, Executive Director of Homes for Good Social Business Group

·      Chris Murray, Chair of Fusion21 and Director of Core Cities UK 

·      Dr. Jess Daggers, independent researcher 

·      Jamie Broderick, Director of the Impact Investing Institute