UK investors are being targeted by a new pioneering Scottish third sector fund which aims to provide a social as well as financial return.

SIS Community Capital has been developed by Social Investment Scotland (SIS), one of the UK’s leading Community Development Finance Institutions (CDFI) and a Scottish third sector lender.

As one of the first social investment tax relief funds available to UK investors, SIS Community Capital will allow individuals to invest in a fund which provides third sector organisations with access to loans at an affordable cost, which would not readily be available from other finance providers.

Scheduled to launch in May, SIS is aiming to attract an initial tranche of up to £500,000 investment from UK based investors. The money will be used to support between five and ten social enterprises in Scotland. Tax relief for investors will be provided in the form of a 30 per cent relief on their investment from their income tax liability.

NCM Fund Services Limited, based in Edinburgh, will be responsible for ensuring compliance of all FCA regulated activities of the fund.

Nick Kuenssberg, chairman of Social Investment Scotland, said: “SIS has built up a great track record and enviable reputation throughout the UK’s social investment market, built upon its experience and expertise of delivering investment funds effectively. Research shows that there is an unmet demand for social investment products, and SIS Community Capital is our response to that demand.”

Thomas Gillan, chief financial officer of Social Investment Scotland, said: “As one of the first funds of its kind available to UK investors, SIS Community Capital has enabled us to look beyond our traditional sources of investment to connect more capital with more communities across Scotland. Social enterprises, charities and community organisations will be able to take advantage of affordable loans to help them grow and continue delivering positive social impacts at a local level.”