Member Article

Pioneering community lenders offered further Government support

The government has today announced an offer of a further £6 million of Regional Growth Fund cash to continue the success of a pioneering community lending programme.

Matched by £6 million from Unity Trust Bank, a specialist bank for social economy organisations, the funds will provide a much needed boost for micro and SME businesses.

It will mean a total of £72 million available to tackle access to finance – through a scheme delivered by the Community Development Finance Association (CDFA).

CDFA’s Chief Executive Ben Hughes said: “New funding is vital for businesses struggling to access finance, and is essential for economic growth. We have a partnership model that works. Public and private money, matched with the local knowledge and expertise of community lenders is ensuring the finance gets to those who need it, and quickly. This approach has already created thousands of jobs and with an average cost per job of £3,485 it’s great value for money.”

“Today’s announcement shows that government recognises the impact we’re having. The new funds are very welcome, but this is a drop in the ocean compared to the demand for finance that we know is out there. CDFA research found a £1.3bn hole in finance provision for SMEs. We hope that other government initiatives – such as the Business Bank – don’t miss the opportunity to fill the gap.”

The CDFA is the voice for community finance in the UK and its members – community development finance institutions – lend to enterprises in the communities where it is most needed. Enterprises like Lordswood Architecture, a windows firm in Stafford which has created 12 jobs in its first seven months, thanks to a loan from local CDFI Black Country Reinvestment Society.

Richard Wilcox, Managing Director at Unity Trust Bank, commented: “As the leading provider of sustainable finance to the UK community development finance sector, we welcome further funding through the Regional Growth Fund and are once again pleased to extend support via the scheme. Unity promotes socially responsible investment, and providing support that creates and retains jobs through local entrepreneurship is an important aim. We already know that our finance and this Regional Growth Fund scheme will help to create and save over 9,500 jobs. Boosting local economies and encouraging the development of communities across the UK is vital. We urge continued Government commitment to small businesses and social enterprises locally through CDFIs to ensure sustainable economic recovery in communities that need it the most.”

This was posted in Bdaily's Members' News section by CDFA (Community Development Finance .