12 April 2011
… the largest ever investment in the sector
The Community Development Finance Association (cdfa) has been awarded £60 million in funding under the Government’s Regional Growth Fund scheme, the biggest ever investment available to Community Development Finance Institutions (CDFIs). The cdfa will receive £30 million allocation from the Regional Growth Fund and £30 million of bank finance over three years. The funding will be used to support the financing and growth of CDFIs, which provide loans to businesses, social enterprises and individuals who are unable access financing through traditional sources.
The Regional Growth Fund is a discretionary £1.4bn Fund that will operate for 3 years between 2011 and 2014 to stimulate enterprise by providing support for projects and programmes with significant potential for creating long term private sector-led economic growth and employment. It was set up to support communities that are currently overly reliant on the public sector for jobs and economic activity to help them take steps towards the development of more sustainable private sector-led growth and prosperity.
The money awarded to the cdfa will be used by its members to serve disadvantaged communities.
Bids for funding from the Regional Growth Fund were highly competitive and the fund was roughly ten times oversubscribed. Government support for the cdfa comes at a critical time as CDFIs have been struggling to raise capital in light of the spending cuts, particularly following the abolition of Regional Development Agencies, a primary source of funding for CDFIs.
Bernie Morgan, Chief Executive of the cdfa, said:
“We are delighted to be one of the successful bidders to the RGF, which was a highly competitive process. Thank you to all who helped put the bid together; it was a truly collaborative process. With this fund we can continue our work of creating jobs and providing growth in localities which need it most. We relish the prospect.”
Lord Heseltine, chair of the Independent Advisory Panel, said:
“I believe the £450m of Regional Growth Fund announced today, which levers in around £2.5bn of private sector investment, supports projects delivering real jobs to real people on the ground now. They show government is getting actively behind the private sector to rebalance our economy.
“I have always believed in the need to give real support to small businesses for whom bidding for £1m is way beyond what they could normally expect. That’s why we are providing more than £150m to give targeted support to small businesses which are the lifeblood of our economy.
“That is why I am also pleased that a number of high street banks are joining the Government in supporting microfinance through the Community Development Finance Association. £30m of Regional Growth Fund will be matched by a further £30m from two banks. In addition we are in detailed discussion with the high street banks over options for schemes to get additional finance to small businesses in economically vulnerable parts of England. We want to develop effective mechanisms to support growing small businesses and small projects through the Regional Growth Fund.”
For more details on the Regional Growth Fund first round announcements visit the BIS website
Read Bernie’s blog posting on the announcement here
Media contacts:
cdfa
Alastair Ballantyne
HB Communications
020 7367 2780
[email protected]