Community Finance Has Hard Time Paying Its Way

Community banks are helping to support enterprise among those on low incomes but are struggling for their own survival, research published recently has revealed. The research, carried out by Community Finance Solutions at the University of Salford, found that community finance initiatives (CFIs) such as credit unions have proven that they can reach deprived communities and contribute to local economies. A survey revealed that more than 71% of clients were receiving state benefits and 87% had no evidence of savings. More than £850,000 of loans were made to business customers, with 111 jobs created and 352 preserved as a result. But the research also found that CFIs find it hard to achieve sustainability. While community development finance institutions (CDFIs) are moving towards 70% operational sustainability, community reinvestment trusts were found to be missing income targets.
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