11.04.2013
Vince Cable’s announcement that an additional £300m will be made available to SMEs through the business bank is a welcome and much needed step forward. To ensure that this money quickly gets to where it is needed, community development finance institutions (CDFIs) are the obvious vehicle to make it happen.
CDFIs are social enterprises that deliver fair finance to those unable to get credit from the banks.
The Community Development Finance Association (CDFA) is the voice for community finance and represents a national network of CDFIs. CDFA Chief Executive Ben Hughes said:
“We know that SMEs are struggling to access the finance they need to start-up, survive and grow. We know that microenterprises, start-ups and social enterprises are struggling even more. And we know that the problem needs urgent action.”
“It is essential that CDFIs now fill this market gap. CDFIs have a mission to support their local communities and economies – they exist to lend money in a fair and responsible way to those that need it, such as the sole traders and microenterprises that aren’t a profitable proposition for banks. They already have the expertise, infrastructure and local knowledge to reach small businesses across the country.”
“Last year CDFIs saw an 88% increase in demand from businesses. Our research has demonstrated that there is unmet demand for finance from over 100,000 businesses each year. We are pleased that the Government recognises the urgent need for action, and it is crucial that CDFIs play a central role in achieving the goals of the business bank.”
Nick Temple, Social Enterprise UK’s Director of Business and Enterprise, said:
“With many start-up businesses, social enterprises and community groups struggling in the tough economic climate, we must ensure that the £300m allocation through the Business Bank reaches them. We hope the Government channels this finance through Community Development Finance Institutions – lenders that best understand the problems facing social enterprises when it comes to accessing finance, and will campaign for this in our role as chair of the Social Investment Forum.”
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