The world’s first stock exchange for social enterprises will be set up in London with the help of money raised from dormant bank accounts, the government has announced.
The Social Stock Exchange (SSE) will be established in the capital with the help of £850,000 from the dormant accounts and it should help improve access to capital for social entrepreneurs.
Money from the accounts will be used to create a social stock exchange, a securities exchange and a secondary business – the Early Stage Investment Exchange – to generate a pool of equity-investment-ready social enterprises for its first sale of stock.
SSE believes the money will be vital in creating a thriving social investment marketplace. A formal regulated investment exchange for the social sector will help offer investment to social enterprises wishing to grow, it believes.
The funds for SSE are part of the £3.1m raised from dormant bank accounts for Big Society projects across the country. Other schemes will help the long-term unemployment start their own businesses, help vulnerable young people into work and fund a community energy project.
The Big Society Investment Fund, which was created to help innovative community schemes, has agreed to the investments “in principle”.
Nick Hurd, the civil society minister, said: “This is about putting money that has been lying around dormant in bank accounts for years to good use in projects that will benefit our local communities and social entrepreneurs.
“These investments will bring real changes to people’s lives. They will help young people into jobs and give the long-term unemployed the opportunity to set up their own businesses.
“The Big Society Investment Fund, under the auspices of the Big Lottery Fund, is doing a fantastic job forging the way. Already, their investment decisions show the range of exciting projects that just need financial backing to get going.”
Elsewhere around the UK, Finance South East will manage an initiative to set up community-owned social enterprises in deprived communities to offer affordable green energy.
John Kingston, chairman of the committee which agreed the fund, said: “The investment committee has just agreed another four in-principle investments. We’ve been impressed by the strength of the deal-flow under the Big Society Investment Fund, and I’m confident we’ll be approving more investments in early 2012, to help build and grow the social investment market here in the UK.”
The Big Society Capital will begin working early in 2012, but the Big Society Investment Fund has been set up to support projects until then.