A Pontypridd-based provider of “little loans to give business ideas a chance” has been praised by business experts and an international foundation – not only for how it helps communities and customers to build resilience, but for its own resilience.
Purple Shoots, a registered charity, provides small loans to start or run a small business to individuals unable to access finance from other sources, such as banks. Its work is a catalyst for entrepreneurship and self-reliance and has created over 500 jobs and started numerous thriving businesses. Remarkably, 96% of clients were on benefits when they received a loan.
This month Purple Shoots, which has made over 560 loans worth over £1.3 million since launching, was named one of the “most resilient” community development finance providers in the whole of the UK in the Citi Microentrepreneurship Awards, funded by the Citi Foundation.
Karen Davies, who founded Purple Shoots in 2013 and runs the charity “on a shoestring budget,” said:
“I set up Purple Shoots to tackle unemployment and disadvantage in Wales because I could see a lot of people who had skills, talents and something to contribute. With longterm unemployment and traditional opportunities limited in many former mining communities in South and West Wales, people often turn to enterprise as a route to economic independence.
“But with few assets, a history of illness or disability, or an adverse credit record, they find it difficult to access finance from mainstream sources to get businesses off the ground. We are different from other lenders and may be able to help people even if everyone else has turned them down.
“We’re thrilled with this recognition of the impact of our work and our own resilience. As a small organisation it can be hard to be noticed, even though we make a profound and unique impact in the communities in Wales and now Gloucestershire where we work. It’s great that what we are trying to do has been recognised.”
Purple Shoots’ customers include Kismet Vintage, a vintage and antique furniture shop in Swansea launched by Claire and Kevin Richards. The business now offers furniture refurbishment and reupholstering too, and Clare and Kevin have launched a second outlet, Kismet Coffee House.
But Kismet only began because Purple Shoots provided a loan when banks would not.
“We tried the normal route of applying for a startup loan,” says Claire Richards, who had suffered from a debilitating spinal injury before launching Kismet, “but computer says no, basically. We approached Purple Shoots and their loan allowed us to step up and open the doors to the public.”
Other thriving businesses which began with a Purple Shoots loan include Lisa’s Cake Station in Tonypandy, whose mouthwatering cakes sell-out daily; SDR Progression in Newport, a physical therapy centre working mainly with children and adults with cerebral palsy; Cardiff’s Bread and Salt restaurant, and Laura Shannon, a slow fashion brand producing items which are fully handmade, hand sequinned and beaded and digitally printed with original prints.
The Citi Microentrepreneurship Awards judges, including journalist James Pickford of the Financial Times, were also impressed with Purple Shoots’ “self-reliant groups.”
Purple Shoots launched these groups because “early on we recognised our loan programme wasn’t reaching the people furthest from employment, lacking the self-confidence and skills to even begin a journey into employment and economic independence,” says Karen Davies, adding:
“So we launched our self-reliant groups (SRG) programme in Wales during 2015. Groups save money and learn new skills together. Purple Shoots helps to establish groups and offers ongoing advice, but the groups run and grow themselves. In 2017 we expanded this programme into Bristol and Gloucestershire, where there are also significant pockets of poverty. Our self-reliant groups and microloans are complementary: when the group or a member develops a business idea, we may be able to offer a start-up loan.”
Another passionate advocate for microfinance is serial entrepreneur Peter Saunders OBE, a former UK Business Angel of the Year who now acts as an advisor to Purple Shoots.
“I’ve always enjoyed combining business with social benefits,” says Peter, “and microfinance is a very interesting area. For most governmental and financial organisations it is too risky and the sums are too small to be viable as a lender. But for Karen and Purple Shoots, their low cost of operating and flexibility mean they are able to make a success of it. Karen is exceptional at what she does and I would love to see governments do more to ensure there is sufficient capital available for responsible finance providers like Purple Shoots to meet the demand from would-be entrepreneurs.”
Bob Annibale, Global Director, Citi Inclusive Finance and Community Development, said:
“Responsible finance providers like Purple Shoots provide a lifeline for small and micro businesses that cannot access mainstream lending, and I’ve seen first-hand the difference community-based lending can make to people’s lives and local communities. The economic activity generated can tackle inequality and promote inclusive growth in communities.”
Purple Shoots must now wait until 12 May 2020 when the winners of the Citi Microentrepreneurship Awards will be announced at an Awards Ceremony in Bristol. Karen Davies added:
“It is remarkable to have survived and thrived for over 6 years, in which our lending has had a profound impact. This award would demonstrate how entrepreneurship and self-employment offers a genuine opportunity to people on benefits or in poverty – if they can access finance.”