Not-for-profit lenders provided £263m to 5,887 businesses and social enterprises over almost the past two years, new figures show.
A report published by the membership body Responsible Finance shows community development finance institutions supported more than 12,000 jobs between 1 April 2019 and 31 December 2020.
The report shows CDFIs made more loans to social enterprises in the UK in the latest 21-month period than in 2018 but the total value of their loans fell.
The report, Setting up for Success, found CDFIs played a critical role in getting finance through government Covid-19 support schemes to areas where it was most needed.
Of the £263m that was lent to 5,887 businesses, social enterprises and start-ups, £109m was lent to 668 social enterprises.
By comparison, a similar study published in 2018 found providers disbursed 475 loans to social enterprises totalling £138m.
The latest report says that £115m was lent to 1,900 small and medium sized enterprises, which created and safeguarded 8,962 jobs.
It says almost 6 out of 10 of the businesses CDFIs lent to were more than 4-years-old, and 19 out of 20 loans were made to businesses with less than 49 employees.
Theodora Hadjimichael, chief executive of Responsible Finance, said CDFIs continued to work where banks could not because of their local-understanding and relationship-based approach.
"With fuel from responsible finance, thousands of businesses and social enterprises have been able to withstand challenges thrown at them by the pandemic, innovate, flourish and grow,” she said.
“Yet still too many businesses and social enterprises can’t access affordable finance because they don’t fit mainstream banks’ lending profiles.
“We must continue to scale up community development finance so more businesses, social enterprises and people can access appropriate and ethical options, especially in places starved of investment.”