It's not about the money | Blog | Foundation East

It's not about the money

I’m on my way to London today to spend time with our trade association, the Community Development Finance Association (CDFA), to be presented with the findings of a review on the first 18 months performance of the country wide Regional Growth Fund product.

For those readers not in the know, the Regional Growth Fund was the brain child of Michael Heseltine shortly after the last election in 2010 and the CDFA’s consortium was awarded £30million from this programme to which it matched a further £30 million of bank borrowing.  This £60 million fund is in the process of being lent to businesses across England that are unable to secure funding from the main stream banks and include enterprises that are new or have only been trading for a few years or who have insufficient security to offer the bank.

So far as delivery under this programme is concerned it’s been a long, slow and uphill road including a 12 month delay from government in issuing the contract, a competing government backed start up loans initiative along with issues experienced by the matching banks that had to form brand new relationships with 30 individual Community Development Finance Institutions (CDFI’s). One of the partner banks had unforeseen trading issues itself just to add to the mix.

Needless to say, the first 18 months have been a success with £13.2 million of funding distributed to 538 viable business creating 2,249 jobs. Quite an achievement when you consider the hurdles faced by the CDFI’s on the ground. But even more interesting is the value for money this programme has achieved which has been calculated as £2,932 for every job created or saved.

Over the past 3 years the Department for Innovation Business and Skills and HM Treasury have commissioned no less than 7 reports evidencing the value for money given by CDFI on the ground including;

  • Building the Business Bank- Strategy Update” – BIS -2013          

  • “SME Access to finance Schemes- Measures to Support SME Growth”– BIS-2013

  • “Delivery of European Structural Investment Funds 2014-2020” –BIS-2012

  • “The Government’s response to Parliamentary Commission on Banking standards.”-HMT & BIS2013

  • “The plan for Growth” – HM Treasury & BIS-2013

  • “Ethnic Minority Business and Access to Finance”- DCLG- 2013

  • “GHK report – The National Evaluation of CDFI's”- BIS- 2010


Lending money in a responsible way to viable businesses so that the capital is repaid and re-lent is a cost effective and sustainable model and is at the heart of everything a CDFI does. CDFI’s are in the main non-profit distributing organisations who deliver on the ground to businesses that are excluded from mainstream finance. Not only do CDFI’s lend money, they support their client base in a proper old fashioned” bank manager”  way, listening and giving one on one support and advice.  This is an invaluable service needed by both start up and growing businesses alike and is something that the mainstream banks do not do and are not likely to do, despite what they like to tell us.  CDFI’s need continuing support to do this valuable work and the fact that the delivery model is achieving a job per loan value of £2,932 proves it works. It’s not about the money, says Jessie Jay, it’s about the value the money achieves to boost the economic growth of this country.  Keep up the good work CDFI’s, take note please those policy makers that control the purse.

For a list of CDFI’s visit

  • About the Author
    Katy Ford

    Katy Ford

    Katy’s knowledge of community finance is extensive, having worked for Foundation East since its inception in 2004. She is recognised locally as an influential business leader by the Suffolk 100 and nationally, as a founding member of AskIf, an online network of community-based lenders. Previous to moving across to community finance, Katy was the treasury manager for a large insurance company. She also has experience as a SME owner, having run a small hotel.

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