Report shows investors do not do nearly enough
A new report has unveiled barriers preventing ethnic minority social entrepreneurs from accessing investment.
The Access Report, conducted by social enterprise Dechomai alongside social investors Firstport and Social Investment Scotland (SIS), investigated the understanding, perception, and availability of social investment among ethnic minority social entrepreneurs in Scotland.
The report found that 70% of investment providers do not have goals or targets for engaging with and investing in ethnic minority social entrepreneurs.
And over three quarters of investors surveyed (76%) offer one size fits all products, overlooking the unique needs and challenges faced by social entrepreneurs from black, Asian, and other ethnic minority backgrounds.
The barriers identified include low awareness of the social investment market, little or no wraparound support during the application process, low levels of trust in financial institutions and difficulty navigating the business support ecosystem.
The report outlines a series of recommendations and opportunities to increase the awareness of social investment among ethnic minority social entrepreneurs and some of the interventions that would allow this group to access and benefit from social investment products so they can scale their social impact.
The findings from the Access Report were presented at a series of roundtable events in Edinburgh and Glasgow throughout April. Attended by investors, academics, entrepreneurs, and social enterprise support providers, the events aimed to highlight the findings amongst industry leaders, discuss the recommendations and call stakeholders to action to implement the report's recommendations.
Social Investment Scotland and Firstport, who supported the research, pledged their commitment to developing a social investment-readiness programme tailored to ethnic minority social entrepreneurs, aiming to open for applications in the autumn.
The research was funded by the Scottish Government's Ecosystem Fund, which aims to support organisations that push Scotland's business community forward, focusing on organisations that help entrepreneurs from under-represented backgrounds.
Bayile Adeoti, Founder of Dechomai, who conducted the research, said: “In launching the ACCESS report on the barriers faced by Ethnic Minority Social Entrepreneurs, it was essential to shed light on the systemic barriers that hinder their success and innovation. This report advocates for equitable policies and initiatives that dismantle these barriers, fostering a more inclusive entrepreneurial landscape where all can thrive based on merit and innovation, regardless of background.
“The recommendations in the report are for all to action, deliver and be held accountable for. There isn’t a silver bullet, this requires a system-wide approach. Unless everyone in the ecosystem is involved, it will only be seen as an ethnic minority issue. This report is also a great example of effective collaboration and equitable partnerships. Let’s create change together.”
Alastair Davis, CEO of SIS, added: “Equitable access to investment is crucial to helping Scotland’s ethnic minority social entrepreneurs thrive and play their part in delivering a wellbeing economy. However, this report exposes the weaknesses within the social investment market which are currently hindering such access. By reducing the barriers facing this group, the report’s recommendations can act as a catalyst in helping to level the playing field.
“SIS is committed to acting upon these recommendations through a range of targeted support programmes and initiatives, which we’ll be developing over the coming year. We would also encourage other stakeholders form across the social enterprise ecosystem to get behind these recommendations and take appropriate action.”
And Gael Drummond, Firstport CEO, said: “At Firstport, we believe support should be designed around people and shaped by reality. The Access report’s findings are a sobering reminder that only by understanding the needs and challenges faced by the people we seek to help, we can offer tailored products that allow them to thrive.
“The report outlines clear recommendations to break down the barriers faced by ethnic minority social entrepreneurs seeking investment. We are ready to spring into action and look forward to working with Dechomai, SIS and other stakeholders in the ecosystem to find systemic solutions that help ethnic minority social entrepreneurs to access the investment they need to realise their ambitions and scale their impact.”
