Community Development Finance Institutions (CDFIs) lend money to businesses, social enterprises and individuals who struggle to get finance from high street banks and loan companies. They help deprived communities by offering loans and support at an affordable rate to people who cannot access credit elsewhere.
Most CDFIs are based within the UK’s most disadvantaged communities. They provide loans and support to:
- Microenterprises (businesses with less than 10 employees)
- Small businesses (with 10-49 employees)
- Medium businesses (with 50-249 employees)
- Social enterprises, community organisations or charities
CDFIs can serve one or several of these markets, but often they specialise in just one. Most lending by CDFIs is to microenterprises and social enterprises.
CDFIs traditionally provide loans to people who face barriers to accessing finance. For example, they may lend to individuals with a poor credit history or little collateral, or provide business loans to entrepreneurs with little business experience.