Responsible finance changes lives – 2022 Impact Report
- Theodora Hadjimichael
Money “makes the world go around”. Without fit-for-purpose finance on fair terms, businesses can’t grow and create jobs, social enterprises are unable to deliver vital frontline services, and millions of households are prey for loan sharks.
Just a year ago, the Chartered Banker Institute hosted a webinar on the importance of community lenders like community development finance institutions (CDFIs) and credit unions in complementing the mainstream. We had a rich and lively discussion about how by being embedded in communities and designing products to make their customers better off, community lenders get great outcomes. [This week] we published the annual impact report of CDFI lending, showing how they supported people, businesses and communities in 2021. The key highlights were:
- CDFIs lent £228 million, a third more than they lent in 2020
- They lent £93 million to 3,200 businesses; more than 90% of these had already been declined funding by other lenders
- They lent £73 million to 380 social enterprises
- They provided 33,000 hours of investment readiness support to their customers
- CDFIs lent £34 million to 67,000 low-income consumers, and thanks to CDFIs each customer saved £190 in interest repayments compared to a high-cost lender
- Through their lending and support to their communities, CDFIs contributed to 10 of the 17 UN Sustainable Development Goals
The figures clearly speak for themselves - throughout the pandemic, CDFIs were a lifeline to many when they needed them most and this trend is set to continue, as the cost-of-living crisis we are currently experiencing, worsens.
We are often told that CDFIs are the UK financial system’s “best kept secret”. We don’t want them to be a secret because we want more people and enterprises to have access to fair and fit-for-purpose finance when they need it.
To make this a reality and continue breaking down barriers to accessing finance, we urge banks to partner with us and invest in CDFIs to increase their impact.