Demand for community lending soars
Non-profit community lenders need greater government and private support to meet rising demand from new markets, delegates at a conference of geographers heard today.
The annual conference of the Royal Geographical Society in Manchester was told that community development finance institutions (CDFIs) are experiencing an explosion in demand from people who have been turned down by banks and building societies.
Dr Lindsey Appleyard of the University of Nottingham presented research to the conference showing the importance of the UK's network of CDFIs in helping businesses and individuals through the recession.
The Community Development Finance Association (CDFA), the UK trade body for CDFIs, welcomed the research.
Bernie Morgan, chief executive of the CDFA, said the government’s efforts to free up capital from mainstream banks is having only partial success and called on it to boost investment in CDFIs as part of this strategy.
‘CDFIs have been investing in the country's most disadvantaged neighbourhoods for years, recycling their profits back into those communities instead of passing them on to shareholders,’ Ms Morgan said. ‘But CDFIs themselves are sorely undercapitalised.’
She added: ‘If the government is serious about delivering real help now to communities, it should allocate more resources to CDFIs - who will very quickly deliver finance where it is needed.’
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