Asked by: Sureena Brackenridge (Labour - Wolverhampton North East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to encourage banks to use community development finance institutions.
Answered by Emma Reynolds - Economic Secretary (HM Treasury)
The Government recognises that credit, when provided responsibly, can be crucial for people facing unexpected expenses or managing their cash flow. That is why it is committed to expanding access to affordable credit, so that everyone has the opportunity to access products and services which support their financial wellbeing and goals.
Community development finance institutions (CDFIs) play an important role in that landscape. I was pleased to chair a roundtable earlier in July attended by banks and CDFIs, where we had a productive discussion about the barriers to achieving greater growth for CDFIs providing personal lending products. The ambition I saw gives me confidence this sector will continue to grow, helping more people achieve their financial goals.
CDFIs also play an important role in helping businesses access finance. In November 2024 the British Business Bank launched the Community ENABLE Funding (CEF) Programme which aims to deploy £150m of funding to ‘not for profit’ lenders, including CDFIs, over the next two years. This means they can better support small and medium-sized enterprises, especially those in underserved communities, by increasing the availability of finance.