Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what plans he has to increase the support that community development financial institutions can offer to SMEs during the covid-19 outbreak; and if he will make a statement.

The Government recognises the vital role that non-banks – including Community Development Finance Institutions (CDFIs) – play in the provision of credit to SMEs. It is grateful for the way the sector has responded to the current crisis and remains committed to promoting competition and widening the funding options available to UK businesses.

The Government’s Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to SMEs across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak. Of the 80 lenders currently accredited by the British Business Bank to offer these loans, 15 are CDFIs. The Government welcomes CDFIs’ participation in CBILS, as well as their continued work to support SMEs beyond this loan scheme.

On broader support for CDFIs, Fair4All Finance, the independent body set up to distribute dormant assets funding to support financial inclusion, has set up a £5 million resilience fund to support credit unions and CDFIs in England. Fair4All Finance have also launched their Affordable Credit Scale-up Programme, designed to provide tailored support?to?sustainably scale?affordable credit.

On 20 May, the Government announced that £65 million of funding through the dormant assets scheme will be released immediately to Fair4All Finance, to increase access to fair, affordable and appropriate financial products and services for those struggling financially, particularly in light of the coronavirus outbreak. This includes an expanded Affordable Credit Scale-up Programme, which aims to improve the access and availability of affordable credit. Additional funding will be made available to the devolved administrations under normal processes through the dormant assets scheme, to be distributed as they see fit.