Access to finance remains one of the greatest barriers for underrepresented entrepreneurs. Women, ethnic minority founders, migrants, asylum seekers and those from deprived communities are too often excluded from the financial system. Their ideas are judged too risky, their credit history too thin, or their circumstances too complex. Yet these are individuals with determination, resilience and talent, and when they are denied finance, it is not just they who lose out, but the economy as a whole.
Our experience shows that the right kind of support can unlock that potential. At Assadaqaat Community Finance we work with people who are excluded from mainstream routes and help them prepare for entrepreneurship. Engagement, training and mentoring are crucial, but what makes the real difference is access to small amounts of finance on terms that meet people where they are. That is why our model is interest-free. By removing the burden of interest, we give aspiring entrepreneurs the headroom to focus on making their ideas work. They repay capital only, and on an affordable basis. This creates the space for businesses to take root and for founders to gain the confidence and track record they need.
The transformation that follows is clear. Individuals who have been told no at every turn gain belief in their own abilities. They begin to generate income for their families and contribute to their communities. And once they can show evidence of a viable business, many of the same institutions that previously rejected them are far more willing to engage. That early-stage interest-free support is therefore not just about getting people started, but about creating the bridge into wider finance and opportunity.
But there is still a gap in the system. Starting a business is one thing; sustaining and growing it is another. Too many of the founders we support face challenges when they are ready to expand. Like any business, there comes a point where new capital is needed to diversify, adapt or scale. Without access to follow-on finance, the risk is that progress stalls and potential is lost.
That is why we are developing the next stage of our own model. From next year, we plan to launch a scheme specifically designed to help businesses that have already proven themselves at the start-up stage but need further backing to grow. It will follow the same principle as our early-stage work — finance without interest — but with a focus on scaling. By combining capital with the right advice and mentoring, we want to ensure that more of the businesses we support move beyond survival and into growth.
But this is not a challenge one organisation can meet alone. If inclusive finance is to fulfil its potential, other organisations need to step up. We have shown that interest-free financing at the earliest stage works. The next step is to ensure that follow-on finance is available, so that businesses started by excluded and aspiring entrepreneurs are not left stranded just as they begin to show promise. Banks, investors, government and funders all have a role to play. Together we can create a pathway that takes people from idea, to start-up, to scale-up and in doing so, unlock an economic opportunity that benefits us all.
Akmal talks about this and more in the Finance & Investment Wales podcast episode The Finance Gap: Who's Being Left Behind? Listen to the podcast here.
