Steve Walker: Adding up success in community finance sector
Jul 2 2008 By Steve Walker
The Government has announced this week that it is to relax the rules governing credit unions in order to help people on lower incomes access affordable loans and avoid the fall out from the credit crunch. What not enough people know is that credit unions are actually part of a wider community finance sector, which aims to ensure personal and business financial inclusion, and which is ready, willing and able right now to provide finance to those having difficulty getting what they need from a bank.
The sector has been around for over 25 years, but has only grown substantially in the UK in the last 10 years, with the realisation that it could provide a vital additional source of finance for small businesses, community organisations and individuals, who might fail to obtain their full finance needs from traditional sources, but who would nevertheless be capable of taking out and repaying a loan and putting it to good use.
The sector’s trade body – the Community Development Finance Association – held its annual conference last week, at which delegates learned that one of the most respected independent think tanks, New Economics Foundation, has stated in its latest report - Surviving to Thriving – ‘that there is a real danger that, as financial markets seize up and turbulence – not stable growth - characterises global and national economic affairs that the sector is being neglected just when it is needed most.’
The Community Development Finance sector is supported by national, regional and local government as well as the private sector - including the banks. It already serves a wide variety of customers, but it has the capacity to serve many more – if only they knew of its existence!
In my experience, putting and keeping the right people ‘in the know’ is a perennial challenge. There are so many channels of communication these days, yet the professionals and public sector officials who could help to spread the word have less and less time to access them, and they change jobs or are ‘reorganised’ more frequently, which usually means their knowledge is lost.
* Steve Walker is Chief Executive of ART (Aston Reinvestment Trust)
