What are CDFIs?

Community development finance institutions (CDFIs) lend money to businesses and people who struggle to get finance from high street banks. They are social enterprises that invest in customers and communities.

CDFIs create jobs and help businesses to start and grow. They help people to pay bills, meet unexpected expenses or improve their home. They help people who may otherwise use high cost credit, such as payday lenders.

They provide support as well as finance, giving extra help and advice where it’s needed.

They are about people. They get to know their customers; they help viable enterprises and people who can afford to repay.

There are currently around 60 CDFIs supporting customers in all regions of the UK. Each CDFI is unique, serving local needs.

Access to fair and affordable finance, delivered responsibly, is vital. Small businesses, social ventures, individuals and homeowners can find it difficult to thrive, or in some cases survive, without it. Yet the gap between the availability of affordable finance and demand from viable, credit-worthy customers is not only wide, it is increasing.

Banks and mainstream lenders have traditionally found it difficult to serve these markets, and are likely to continue to find it difficult to provide direct services, especially to the UK’s deprived communities.

For those unable to access mainstream finance, CDFI support is an alternative option. A rough estimate of current potential annual demand for community finance is in the order of £5.45 to 6.75 billion.

CDFIs fill a gap in the financial services system created by the inability of banks and other mainstream financial institutions to provide fair access to affordable credit to all markets.

In 2012, CDFIs delivered £200m to over 33,000 customers. Given the right public support mechanisms, CDFIs have the potential to generate sustainable economic development and social well-being at the heart of UK communities.

Access to finance is one of the biggest drivers of economic growth

  • Only one in 10 small businesses consider credit to be easily available

  • The single largest barrier facing social enterprises is access to finance

  • Users of high-cost credit have quadrupled in the last four years to four million

  • Low income homeowners make up around a half of all poor households




Nick Boyle believed that older and disabled people should receive high quality care services in their own homes. So in 1994 he set up Highland Home Carers to deliver that vision in the Scottish Highlands. They received finance from Big Issue Invest (BII), a CDFI that specialises in financing social enterprises.

Big Issue Invest partnered with fellow CDFI Co-operative and Community Finance to lend £300,000 to HHC to buy out their previous investor. The lower interest rate and better terms have enabled the company to expand, take on new contracts and move forward.

Stephen says, “The new deal means there will be more profit and therefore more money to invest in our staff. These people are our asset and in investing in your people you improve the quality of your service – which is at the very heart of caring.”

The CDFA is the voice for providers of fair and affordable finance.
They represent and support a strong national network of CDFIs who  lend to people, businesses and social enterprises across the UK, supporting local jobs, families and economies.