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We are the voice of the Responsible Finance industry
Soaring to new heights:
where growth meets inclusion
CDFIs’ 2024 lending to underserved businesses, social enterprises and people, creating jobs and businesses, transforming lives.
CDFIs now operate at
the scale they did in 2023
Improving access to finance remains vital.
Our goal is to continue scaling-up the CDFI sector to unlock sustainable and inclusive economic growth.
Building thriving places and stronger local economies:
Lyndsay, Neo Walk: Selling handmade walking sticks worldwide
“I needed a walking stick, but nothing reflected ‘me’ in the walking sticks I was seeing. So I made my own, then launched my business in 2013.”
Lyndsay’s business creates bespoke walking sticks. She used her own savings to finance the firm, then ploughed everything back to grow it.
In 2023 Lyndsay wanted to create a hub where customers could try sticks in person. An advisor introduced her to a CDFI, the Business Enterprise Fund (BEF).
“BEF were amazing: very interested in what we do and who we help. The Hub is a magical place and BEF helped create it.” Now Neo Walk has ten employees and customers in 35 countries.
Championing small businesses
Customer story: Homeland Delicacy
Ada Uchegbu is the chef and founder of Homeland Delicacy. She used to cook West African takeaways from home but was offered the chance to be part of Europe’s largest purpose-built food hall. But she needed to raise a small amount of funding:
“I was introduced to Purple Shoots. They were so supportive and understood my situation and background.”
Purple Shoots’ loan meant Ada could scale up her business. Homeland Delicacy has gained rapid acclaim for its authentic West African cuisine and event catering services.
Microlending to transform lives and local economies:
Many lenders can’t support people who have been vulnerable, unemployed, ill, are refugees with the right to work, are former prisoners, or don’t have good credit scores.
A group of specialised CDFIs provide mentoring, grants and loans to enable people to become self-employed, launch a business or return to work.
In 2024
they lent over half a million pounds, and of their loans:
£2,876
was the average loan size
100%
hadn’t been able to access finance elsewhere
44%
were made to women entrepreneurs
66%
were in the UK’s 35% most disadvantaged areas
99%
were outside London
Personal lending:
Giving a green light to financial inclusion.
Millions struggle to access fair credit when they need it most. CDFIs look beyond credit scores, so they can often say “yes” where others say “no.”
No Data Found
67%
of loans were to women
24%
of loans were to Black, Asian & Other Ethnic Minority groups
30%
of loans were to those aged 34 or under
39%
of loans were to those living with a disability
55%
had used a high-cost lender in the last year
30%
of loans were to lone parents
Tides of transformation
In 2023, CDFIs transformed communities by:
Driving economic growth
- 12,135 jobs created or safeguarded
- 4,138 enterprises created or safeguarded
- 353 enterprises supported to scale
- 16,195 hours of business support
Reducing hardship for households
- £29m of interest saved
- £601m of unclaimed benefits identified
- 660,127 customers signposted to further support
Enabling social impact
- 38% of social enterprise loans and 60% of small business loans were in the 35% most disadvantaged areas in the UK
- CDFIs and social banks lent £119m to 371 social enterprises
- 93% of social enterprise loans were outside London
Contributing to SDGs 1, 5, 8 & 10
Business lending:
Unleashing new waves of entrepreneurial potential
No Data Found
No Data Found
24%
of loans were to Black, Asian & Other Ethnic Minority entrepreneurs
41%
of loans were to women
99%
were declined by mainstream finance providers
74%
of SME loans were backed by government guarantees
75%
of SME loans were eligible for Community Investment Tax Relief
60%
of SME loans were in the 35% most disadvantaged areas of the UK
Customer story: Esmie Stewart
“They asked lots of questions and went through everything with us to make sure it would work and the figures made sense. It was like getting free business consultancy.” Read more here
Customer story: Fiona
“I’m a staff nurse in Surrey. After the pandemic I was planning my dream wedding. Although I had saved as much as I could, I needed to borrow £1,000. I applied to a bank and knew I could afford the repayments so I was shocked when they turned me down. I found Salad Money and it seemed to make sense – if they could look at my income and outgoings, they should be able to see I could afford to borrow what I needed” Read more here
Social enterprise lending:
Strengthening communities – in 2023, CDFIs and social banks lent
to 371 social enterprises
of loans were in the
most disadvantaged areas of the UK
Customer story: Rotherham Rise
“Thanks to Key Fund, we have security. We walk into our building now. We can plan long-term and that includes looking at ways in which the building can generate more income for us.”
Security, stability and a stronger future: that’s what a loan from a CDFI, Key Fund, gave a Rotherham charity which supports survivors of domestic violence. Read more here
Investing in CDFIs: catalysing growth
In 2023 CDFIs raised £183m, including:
- Block Inc. & ART Business Loans: £2m, plus match from Unity Trust Bank
- Ceniarth & Business Enterprise Fund: £1m
- Ceniarth (with part-guarantee from Fair4All Finance) & Salad Money: £1.2m
- CITR investment: over £13m raised & £26m deployed
- City Bridge Foundation: £600,000 for a first loss pilot with personal lenders
- Lloyds Bank: £42m into the £62m Community Investment Enterprise Facility Phase Two
- NatWest Group: £900,000 to support affordable credit
Community Investment Tax Relief drove a much higher level of financial involvement from us than if it had been just strictly donations,” says Tim Stumpff, an investor in CDFI, Purple Shoots.
The second phase of Community Investment Enterprise Facility is backed by £42 million from Lloyds Bank, alongside investments from Better Society Capital and the participating CDFIs
In 2023, a record number of new investors and partners supported CDFIs’ growth, including mainstream banks, family offices, trusts and foundations, technology companies and business and consumer groups.
Surging forward
How to build bigger waves of change
INVEST IN CDFIs
- Introduce a Fair Banking Act
- Launch a new British Business Bank scheme specifically for community lenders
- Expand CITR
PROMOTE AWARENESS OF CDFIs
- Improve bank referral programme
- Unlock legacy funds for CDFIs
- Expand the credit broking exemptions
IMPROVE THE SUSTAINABILITY OF CDFIs
- Make the growth guarantee scheme permanent
- Use dormant assets for CDFIs
- Create bad debt funding or guarantee for personal lenders
Why is a record year of CDFI lending important?
- Because of what the funding enables for a business, a social enterprise, an individual or family.
- The money is getting exactly where it's needed the most.
- It’s more than just the loan.
Watch the video and read the report to learn more.
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Responsible Finance is the trading name of the Community Development Finance Association (CDFA). The Community Development Finance Association (CDFA) is authorised and regulated by the Financial Conduct Authority with Firm Reference Number 1005502. Company number 04111603
