# Charity Bank secures £1 million capital from two foundations

- Link: https://fundraising.co.uk/2006/02/13/charity-bank-secures-1-million-capital-two-foundations/
- Published: 2006-02-13T00:00:00+00:00
- Author: Howard Lake

Charity Bank, the world’s first registered general charity and authorised bank, 
has secured £500,000 each from Esmee Fairbairn Foundation and Northern Rock Foundation
as capital to underpin its growth.
The funding comes in the form of 10 year subordinated
convertible loan stock on which the bank will pay 4% per annum.

For the next five years this will count towards the capital Charity Bank needs to
support its growing lending business.

The investments were a highly innovative capital transaction, and a first for the
UK outside the public and private sectors, according to Charity Bank. They will 
enable the bank to extend its finance to more social enterprises.

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Chief Executive of Charity Bank, Malcolm Hayday, explained the investment. “If community
development finance is to move from the margin to the mainstream in the UK, it has
to be adequately capitalised”, he said. “The ability to attract capital from socially
motivated individuals, trusts and institutional investors is a major challenge for
all of us”, he added.

Fiona Ellis, Director of Northern Rock Foundation, explained the reason for their
support: “Charity Bank has offered the Foundation a welcome opportunity to invest
some of our reserve in direct pursuit of our mission. We are delighted to be able
to use our resources in as many ways as possible to help charitable organisations.”

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