The Social Investment Market Hit £5.1 Billion — So Where's the CIC Share?

Big Society Capital published its latest market sizing, and the headline number is impressive. The UK social investment market has reached £5.1 billion — a twenty-fold increase in non-bank lending since 2011. Over 5,000 transactions. Hundreds of thousands of social outcomes delivered.

The social investment market is real. It’s substantial. And it’s still not reaching most CICs.

I’ve lost count of the number of times I’ve been told that the answer to CIC funding problems is social investment. Go talk to Big Society Capital. Apply to Access. Look at the social investment tax relief. The tools exist. The market is there. What’s your problem?

The problem is that £5.1 billion sounds like a lot until you look at who’s getting it. Social property — housing, mostly — accounts for the largest segment. Impact venture and social lending make up the rest. The typical recipients are large, established organisations with asset bases, track records, and professional management teams.

The typical CIC — small, community-rooted, asset-light — doesn’t look like an investable proposition to most social investment funds. The due diligence costs are too high relative to the investment size. The risk profile doesn’t fit the fund’s mandate. The expected financial returns don’t meet the threshold.

Big Society Capital’s strategy for 2021-2025, which is being developed now, talks about targeting a £10-15 billion market by 2025. That’s an ambitious target, and I hope they hit it. But unless the strategy includes specific mechanisms to reach smaller organisations, the £5.1 billion will become £10 billion without most CICs seeing any of it.

The market has grown twenty-fold since 2011. That’s genuine progress. But progress isn’t the same as access, and access is what CICs need. The question for the next phase of social investment market development isn’t whether the market can get bigger. It’s whether it can get more inclusive.

From where I’m sitting, the jury’s still out.