Community development finance institutions will receive an extra £12m from the Regional Growth Fund and Unity Trust Bank, it was announced yesterday.
The money, in the form of a £6m grant from the RGF and a £6m loan from Unity Trust, will add to a £60m fund already being delivered through the Community Development Finance Association, the umbrella body for CDFIs.
That fund comprises a £30m RGF grant and two £15m loans – one from Unity Trust and one from the Co-operative Bank – and has been set up to create more than 8,000 jobs in deprived areas of England.
The CDFA will pass the money to its members, who lend to social enterprises, businesses and individuals in deprived areas.
Ben Hughes, chief executive of the CDFA, said that the fund had already created thousands of jobs at an average cost of £3,485 per position.
"This announcement shows that government recognises the impact we’re having," he said. "The new funds are very welcome, but this is a drop in the ocean compared with the demand for finance that we know is out there."
A due-diligence process is still to be completed before the money will be available.