By: Sam Moore | Head of Community Bank International at Bendigo and Adelaide Bank Limited | January 17th, 2017

This post first appeared on LinkedIn

The increasing impact of compliance and prudential regulation are limiting access to financial services and hindering national productivity”, says Bendigo Bank’s CEO Mike Hirst. “SMEs are the most productive economic entities due to their structures, flexibility, payback periods and lower capital intensity,” Hirst has said. “This lack of adequate financing for SMEs is detrimental to the broader national agenda.

In considering the SME financial exclusions issue Bendigo looked to its community-owned social enterprise partners, Alliance Bank® partners. Together they worked on a solution, the Social Impact Loan Program.

The Social Impact Loan program enables Alliance Bank® partners to support businesses and projects that have wider community benefits (ie social impact). Leveraging Bendigo’s infrastructure, Alliance Bank® partners can apply the profits from running their social enterprise to borrowers that wouldn’t qualify for loans from Bendigo’s balance sheet because of the risk and return restrictions. Alliance Bank® partners determine the risk and reward themselves and importantly can consider local knowledge and community benefit in making these Social Impact Loans.

The first Social Impact Loan was made by BDCU Alliance Bank® in December 2016 (see It enables local apprentices to access a no-interest loan to purchase tools of trade, and is part of a wider Apprentice Support Program designed to support community sustainability through seeding and fostering local business. The broader program includes discounts on tools from local suppliers, a financial literacy mentoring program and a professional mentoring program.

BDCU CEO, Jan Edwards, said the Social Impact Loan Program gives young locals a career head start, access to funds they mightn’t otherwise have had and the support they need to budget and take control of their finances and their careers.Aside from the social value of the program, over the long term BDCU Alliance Bank will benefit from ongoing loyalty from program participants. A great example of Creating Shared Value (Porter and Kramer, Harvard Business Review, 2011).

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