Community development finance institution loans grew by 35% to March 2011

Report by the Community Development Finance Association says the figure went up from £513m to £714m

Harry Glavan
Harry Glavan

The loan book of community development finance institutions grew by about 35 per cent in the year to March 2011 compared with the previous year, according to a report by the Community Development Finance Association, published last week.

Inside Community Finance says that the loan book of CDFIs, which lend to individuals, businesses and third sector organisations in deprived communities, stood at about £714m at the end of the year, up from £513m at the start.

The report, based on responses from 57 of the CDFA’s 60 members, also says the total size of the CDFI loan book has more than tripled since 2006, when it was £234m.

However, total lending in the year fell slightly, from £200m to £191m in the past year. CDFIs lent to about 23,000 customers; about £145m was lent to 390 social enterprises and charities.

Harry Glavan, head of policy and communications at the CDFA and author of the report, said that despite the growth the future of the CDFI sector was not secure.

"Despite having demonstrated that community development finance delivers a strong return on investment, the quality and quantity of support CDFIs might secure is unclear," he said in a statement accompanying the report. "The ability of CDFIs to deliver their primary mission of serving hard-to-reach markets hangs in the balance."

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