The CDFA will receive £60m to lend to small, micro and social enterprises, says Vince Cable
Vince Cable is talking at 1pm to the Community Development Finance Association (CDFA).
A common complaint I hear when I am out and about meeting sole traders or entrepreneurs is the struggle to get finance through mainstream sources. This is a serious challenge to UK growth.
It’s why I have made it one of my priorities to get credit flowing again and why only last week I announced further detail of the government-backedBusiness Bank. This will facilitate the provision of loans to more firms through banks and other financial institutions.
But what about those firms and organisations which still need finance but struggle because they are deemed more risky and too expensive to administer in disadvantaged areas.
We need to ensure that all levels of business in the community – including charities and social enterprises – have the opportunity to access finance which is vital to the local economy.
Well today I will be speaking at the annual conference for theCommunity Development Finance Association (CDFA) to show how Government funding is supporting their members to meet the growing demand from small business for alternative sources of finance.
The association will receive £30m from the government’s Regional Growth Fund (RGF) which has been matched with a further £30m by theCo-operative Bank and Unity Trust Bank to provide lending to small, micro and social enterprises.
This £60m funding will create or safeguard over 8,000 jobs over the next six years and when you see the projects that will benefit then you realise the impact it will have in the community.
It means that the local social enterprise will be able to provide better care in the community or that the small firm can improve their production process to help them expand. Small firms such as the one I will be visiting today – a kitchenware manufacturer called Utensa, based in Tyseley, Birmingham.
Utensa recently received loan through Aston Reinvestment Trust (a community finance provider) to improve their tooling, create two jobs and assist with marketing expenditure.
This is a great boost to Birmingham and the programme as a whole is a real boost to the country’s livelihood; supporting local enterprise and being the starting point for expanding community finance into every neighbourhood, facilitated by programmes like the RGF.
This is also a perfect example of why we use intermediaries to help us distribute the RGF. They have the local knowledge of their communities and can identify and back those viable businesses which fit with local growth priorities.
Above all this is an effective way of reaching start-ups or sole traders in parts of the country that need it most – something I understood even better when listening to the views of entrepreneurs at the recent MADE festival in Sheffield.
That is why we will continue to support the important work in the community finance sector. It continues to fill those gaps in the market to drive growth forward and bring social and financial benefits to communities across the country. We are listening to the feedback we get and we are doing something about it.
Having a functioning, diverse supply of finance is an integral part of the government’s industrial strategy and is key to securing a recovery based on growth. I look forward to seeing what other projects will benefit from the RGF and a thriving community finance industry.
Vince Cable is secretary of state for business, innovation and skills
This content is by Guardian Professional.