Speaking at the launch of the cdfa annual survey, Inside Out 2010, Small Business Minister Mark Prisk outlined three ways the coalition government will be supporting the UK CDFI sector.
Mr Prisk set out reforms to the Enterprise Finance Guarantee scheme (EFG), confirmed the Big Society Bank will work to capitalise CDFIs and also invited the sector to bid for the Regional Growth Fund.
Mr Prisk acknowledged the difficulties for microenterprises and sole traders in accessing finance, stating “CDFIs can fill the gap…helping businesses to access the microfinance that they need”
From April 2011 the Government will pay out on defaults of up to 20 per cent of each lender’s Enterprise Finance Guarantee (EFG) portfolio on the first £1 million of loans, an increase on the current 13 per cent. The government is also to looking to increase the uptake of EFG lending from banks to CDFIs by issuing guidance on the scheme and how it can be used attract capital from mainstream banks.
Mr Prisk also encouraged the sector to bid for the £1.4bn Regional Growth Fund stating that “CDFIs are well positioned to make strong bids for RGF support in line with the objectives of the fund.” CDFIs were also invited to engage in a a range of upcoming policy developments such as the Big Society Bank and the Enterprise Allowance Scheme which supports Job Seeker Allowance recipients for the first three to six months in setting up a business.
For the full BIS press release, see below:
http://nds.coi.gov.uk/content/Detail.aspx?ReleaseID=417027&NewsAreaID=2