Scottish National Investment Bank ‘should also lend to third sector’

Monday May 20th, 2019

The potential of the new Scottish National Investment Bank will be compromised if it is limited to funding only commercial activities, the Scottish Government has been warned.scottishgovernment_logo

Legislation going through the Scottish Parliament specifies the main objective of the bank is to give financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment in Scotland.

But Mariana Mazzucato, director of the UCL Institute for Innovation & Public Purpose and member of the Scottish Government’s council of economic advisers, said there was “no reason” why the bank should be restricted to lending to the private sector.

“It really narrows the scope to use the word commercial,” she told the parliament’s economy, energy and fair work committee.

The new bank should also be open to investing in social enterprises and other third sector organisations that are committed to achieving the socioeconomic missions set out by government, said Mazzucato, who also sat on the advisory group for the bank’s implementation.

Many of the problems that are out there…globally are being invested in by philanthropies, by public and private institutions, by civil society organisations, so that’s what you want to be doing,” she said.

“The role of the bank is to fuel that patient finance towards those organisations that are willing to engage in that mission. You pick the willing – you don’t pick the winners.”

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