Making It Work: Finance start-up aims to make funding home loans fair

When Pádraig Rushe launched Initiative Ireland three years ago, his aim was to level the playing field in property lending, allowing ordinary people to co-fund social and affordable housing.

Since then, Initiative Ireland has financed more than €25 million in loans. Now, under a new partnership with the Credit Union Development Association, it is preparing to launch a fund that will allow credit unions to lend to Approved Housing Bodies (AHBs) nationwide.

It’s an important milestone for the start-up, which plans to ramp up activity this year in both Ireland and Britain.

“​We’ve been growing slow and steady for the last three years, but we want to really scale our lending this year both in Ireland and through Initiative Financial Services UK, our British entity,” Rushe said.

“We’re delighted to work with credit unions because their values reflect our own commitment to honest, fair and inclusive finance. We expect to start lending to AHBs early this year and we’re targeting €300 million in loans.”

Rushe describes Initiative Ireland as a platform for “impact investment”. The 38-year-old, from Kildare, came up with the idea for the venture five years ago, having worked in banking for most of his career.

He runs Initiative Ireland with his father, also called Pádraig, the former director of corporate banking at Bank of Ireland.

“Someone asked me recently if working with my father was a form of nepotism and I said ‘yes, absolutely, in favour of the company’,” Rushe said.

“He was just coming up to retirement when I was starting Initiative Ireland and he shares, and has very much shaped, my own values and sense of morality.

“Working in banking over the years, I’d often felt at odds with the industry, which I think focuses on short-term gains with little thought to the long-term consequences.

“In my mind, the only way finance providers can really be sustainable is by helping to enable social and economic good.”

Rushe set up Initiative Ireland with the aim of allowing members to co-fund secured property loans which, he says, are often “only accessible to multinationals or specialist funds”.

It acts as a property lending marketplace and loan agent, managing funds on behalf of the 2,000 private, pension and corporate lenders on the platform.

They can lend as part of private syndicates, co-funding short-term senior secured property loans for social and affordable housing developers. The minimum lending commitment required from private lenders on the platform is €500.

“Our lending team originates and manages each loan from end to end on behalf of investors, secured with a first legal charge over the property,” Rushe said.

“We finance the construction of energy-efficient social housing and affordable housing projects and lend only to experienced developers. We’re one of the few alternative lenders who will fund loans below €1.5 million.”

Initiative Ireland is supported by Enterprise Ireland as a high potential start-up. The company employs eight people and is headquartered at NovaUCD, the centre for new ventures and entrepreneurs at University College Dublin.