Responsible Finance

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Spending Review: Government should invest more in CDFIs

27.06.12

In response to the Spending Review the Chief Executive of the Community Development Finance Association, Ben Hughes, expressed concern about the continued cuts to departments closely aligned to Community Finance activity, but encouraged government to make each pound go further by investing through CDFIs.

CDFIs lend to help local small businesses access the funds they need to start up or grow, they help innovative social enterprises and community groups create positive economic and social change and they offer an affordable, responsible alternative to pay day loans.

Ben Hughes comments

 “Everyone from local councils up to Whitehall is searching for innovative solutions to tackle economic and social problems with increasingly scarce resources. Government at both levels are missing a trick. Community Development Finance Institutions (CDFIs) deliver social and economic change by lending into local communities that aren’t able to access mainstream finance. By recycling their capital over and over again they generate strong social and economic impacts in the communities they serve. Last year they lent almost £200m, but recorded enquiries topping £1bn.

 With stretched resources, government both local and national should invest in CDFIs now to help meet the needs of communities hit by a slowing economy and government cuts. It is imperative that Local Economic Partnerships view CDFIs as core delivery partners when laying out their plans for economic growth and access to finance programmes.”

Ends

  1. The Community Development Finance Association (CDFA) is the voice for providers of fair and affordable finance. Our mission is to create a thriving community finance industry, bringing social and financial benefits to neighbourhoods across the UK. We represent a national network of CDFIs. For more information about the CDFA please visit www.cdfa.org.uk
  2. Community Development Finance Institutions (CDFIs) are social enterprises that support communities by providing affordable finance that would otherwise not be available. By making loans, they are able to recycle this finance again and again into neighbourhoods where it is most needed.

  3. The Comprehensive Spending Review publications are available to download from https://www.gov.uk/government/topical-events/spending-round-2013

 

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