Supporting left-behind places

The challenge

Small businesses play a crucial role in society by creating and sustaining jobs for local people and supporting local economic activity. This is especially true in left-behind communities, yet many sustainable small businesses cannot access mainstream finance. As a result, they struggle to thrive and survive. Community Development Finance Institutions (CDFIs) present one possible solution to this problem, but the market is not big enough to meet the estimated funding gap of up to £1 billion.

Our approach

The Community Investment Enterprise Facility (CIEF) was established to provide capital to CDFIs, and to build a better understanding of the financial and social impact performance of CDFI lending. It will support up to five CDFIs in meeting the demand for finance from underserved small businesses in disadvantaged communities or led by disadvantaged groups. The CIEF is a co-investment facility, where the CDFIs receive some initial upfront capital but must secure match funding to draw on the full CIEF commitment. The facility aims to leverage additional money and new investors into the CDFI market.

To date, three CDFIs have been supported, who have in turn supported 111 small businesses. One CDFI to obtain a commitment of £7.5 million from the CIEF is BCRS Business Loans, it has also secured a further £7.5m from Triodos Bank as match funding.