Dr. Nick Henry and Philip Craig are the authors of this report which examines the evidence around the need for community finance initiatives – Mind the Finance Gap.

Mind-the-Finance-Gap-summary-report available here/pdf format

Funded by The Royal Bank of Scotland and in association with the CDFA the report examines finance demand from social and business sectors which fall outside the consideration of mainstream banking  services.

These groups may be businesses and entrepreneurs, they may be civil society organisations with a wide social remit, including social enterprises or charities. They can also include individuals with unsteady regular income or homeowners with a need for financial support for renovations, for example.

In 2011, the big banks made £75 billion of loans to small and medium enterprises. Between September 2011 and August 2012 banks and building societies combined provided £7 billion of overdrafts and loans and £137 billion of credit card lending to individuals . For those businesses, organisations, individuals and homeowners that cannot access mainstream finance such as that described above,  

This report estimates current potential annual demand for community finance in the UK (excluding the Green Deal) is at some £5.45 – 6.75 billion. In contrast, in 2012, community finance organisations delivered an estimated £0.7 billion of community finance to UK businesses, civil society organisations, individuals and homeowners. Community finance investments generate a wide range of economic and social benefits (especially within the most disadvantaged and excluded communities of the UK) – and which meet a wide range of Government policy objectives.

Community finance organisations, if capitalised to do so, have the potential to generate sustainable economic development and social well being at the heart of UK communities. Currently, the majority of potential economic and social benefits are being lost to UK economy and society.

You can access a full copy of the report in pdf format here.