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Include community finance support in Treasury remit, says CDFA

Finance | Vibeka Mair | 1 Feb 2012

The Community Development Finance Association (CFDA) has called on government to enshrine support of community finance as an HM Treasury remit, as part of its new campaign to build the community finance sector.

CDFA has launched a new report Just Finance which sets out a strategy to improve support to community development finance institutions (CDFIs) which typically lend to small businesses, social enterprises and individuals, who find it difficult to access credit.

Ben Hughes, CDFA’s chief executive said:
“The gap between the availability of affordable finance and demand from viable, credit-worthy customers is not only wide, it is increasing: 370,000 businesses, 3,300 social enterprises and 3 million individuals are ‘financially-excluded’.

“The UK’s community finance sector is the unsung hero of the financial services industry. CDFIs have been quietly providing community finance to some of the most disadvantaged communities in the UK for more than ten years. But the sector is too small and has incomplete geographic  scope to meet the gap between demand for finance and credit availability.”

CDFA’s ten-point plan to improve support for CDFIs, included in its new report is:

1. Enshrine government support of community finance as an HM Treasury remit
2. Require finance service providers to disclose lending data
3. Integrate and embed community finance into the larger financial services system
4. Create a community Finance partnership scheme
5. Launch a nationwide bank-to-CDFI referral system
6. Support and grow mentoring and advisory services
7. Communicate, publicise and promote community finance
8. Set up a CDFI Fund
9. Drive social investment into the community finance sector
10. Develop an array of specialist funding streams

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