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Economic Evaluation of South of Scotland Loan Scheme - final report


The South of Scotland Loan Scheme (SoSLS) was formally established in 2004 with the objective of delivering economic added value in the South of Scotland by offering soft loans as part of a wider package of funding support for businesses identified as having job creation and growth potential. The purpose of the evaluation was to quantify the results of the Scheme to date, in line with EU funding requirements, and inform future decisions with regards to the future operation of the loan Scheme.


The research methodology included interviews with stakeholders, partners, business advisors and beneficiary businesses; analysis of the consultation findings and review of financial/operational data provided by the Client and Scheme Administrator; and an economic appraisal of the quantitative gross and net impacts of the loan Scheme.


SoSLS has been successful, although the number taking up loans is considerably lower than envisaged. Against its original objective, the loan Scheme has delivered 40 soft loans to businesses across the South of Scotland with a further six pending approval and has created quantifiable impacts for the beneficiary businesses including the creation/safeguarding of employment, turnover and profit. It is estimated that the gross and net impacts of the loan scheme include 215 gross jobs, 110-120 net additional jobs, GVA of £3.7m per annum and salaries of £2.2m at the national level. However, the results also show that, to date, the Scheme has underachieved on many of its revised targets and has had a large surplus of funding not being taken up through loan funding.


A number of recommendations for continuation of the loan Scheme are made: a low interest loan Scheme is the most effective and popular way to support potential high growth SMEs in the South of Scotland; the eligibility criteria could be amended to be more responsive to the needs of the local business base; the loan fund should be more flexible; the management structure and outside contractor involvement has been effective and should continue; SoSLS needs to set realistic and attainable targets in terms of the number of loans issued and the impacts generated in the future; the amount of funding to be drawn down needs to be revised; and revision of the board membership is needed.

Author Ekos Limited
Published Year 2009
Report Type Evaluation
  • Investment
    Debt investment/loans