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Community Development Finance Institutions

Question for Treasury

UIN 56342, tabled on 15 October 2021

To ask the Chancellor of the Exchequer, whether he plans to mandate large bank investment through social lenders such as Community Development Finance Institutions.

Answered on

22 October 2021

The Treasury recognises the vital role that non-banks, including Community Development Financial institutions (CDFIs), and challenger banks play in the provision of credit to SMEs. I would like to take the opportunity to reaffirm that the Government recognises the vital role that CDFIs play in the provision of credit to SMEs and is grateful for the way the sector has responded to the current crisis. It is worth noting the Government remains committed to promoting competition and widening the funding options available to UK businesses.

Whilst there are no plans at this time to mandate large bank investment through social lenders like CDFIs, I should be clear that all lenders accredited under the government-backed Recovery Loan Scheme can benefit from the transfer and assignment of the guarantee, which is something that alternative lenders requested to support their ability to access funding.

Answered by

Treasury