This is the second in a series of updates about our work to support underserved small enterprises in disadvantaged areas across the UK through community investment. We set out a five-year vision for community investment which has been developed collectively by the enterprise lending Community Development Finance Institutions (CDFIs).
We believe that if these underserved small enterprises can access appropriate finance then they will be able to create and preserve more jobs for local people and economic activity will be stimulated in the areas where it is needed most.
In our first blog of the series, we set out how enterprise lending CDFIs defined themselves and what sets them apart from other lenders. In this blog, we share their collective five-year vision for the sector which came out of the same workshops we ran with 14 organisations in Sheffield and London a few months ago.
The discussion was inspiring yet pragmatic on where the CDFI sector could reach in five years’ time. On the back of the workshops, we developed a series of vision statements and tested them with all enterprise lending CDFIs1 to gauge the extent to which they were representative of their organisations. These are outlined below with a note of the percentage of organisations that felt the statement was completely or very representative of their organisation’s view2.
The enterprise lending CDFI sector in five years’ time is:
- Continuing to scale its lending and support to more underserved SMEs to create and preserve more quality jobs and generate greater local economic activity; (100%)
- Recognised and understood as a route to achieving measurable impact in more disadvantaged communities and the wider economy; (100%)
- More investible with strong people, processes and platforms present across the sector; (86%)
- Able to access appropriate and sustainable sources of capital from a diverse investor base. (93%)
- Operating in a favourable policy environment that promotes small enterprises. (86%)
These vision statements will act as a guide for the range of community investment initiatives we’re working on with partners including the provision of socially motivated capital, building knowledge and convening stakeholders. Our hope is that other interested organisations will adopt them in their thinking.
Look out for our next blog on what’s happening with the Community Investment Steering Group which is being led by BSC and Citi.
1 There was a 75% response rate out of 19 Enterprise Lending CDFIs.
2 The options given on the survey were: not at all representative, not very representative, moderately representative, very representative, completely representative.