About CDFIs

‍Community Development Finance Institutions (CDFIs), also known as responsible finance providers, are locally rooted, mission-driven lenders. They provide affordable finance and tailored support to individuals, businesses, and social enterprises that are unable to access suitable funding from mainstream providers.

As not-for-profit social enterprises, CDFIs look beyond credit scores to understand each customer’s circumstances and local context. Using a flexible, transparent approach, they only lend to those who can afford to repay, helping customers secure the right loan and achieve the best possible outcome.

By combining responsible lending with tailored support, they support their customers in building financial resilience, create jobs and contribute to stronger local economies.

Why CDFIs matter

Millions of people and businesses across the UK remain underserved by the mainstream financial system. Without access to appropriate finance, individuals can be pushed towards high-cost or illegal lenders, while otherwise viable businesses may be unable to invest, grow or create jobs.

CDFIs help address this gap. They provide fair and affordable finance to customers who have often been declined elsewhere, alongside the support needed to achieve sustainable outcomes.

Impact

The impact of CDFIs is already proven. In 2025, they lent almost £390 million to businesses, social enterprises and individuals. This included more than £181 million for start-ups and small businesses, helping to launch nearly 6,000 new businesses and create more than 7,000 jobs.

CDFI lending reaches people and places that are often underserved by mainstream finance:

  • 43% of small business lending, 52% of social enterprise lending and 45% of consumer lending was invested in the UK’s most disadvantaged communities.

  • 37% of small business lending went to women-led businesses, more than double the proportion of women represented in small business leadership.

  • 21% of small business lending went to ethnic minority-led businesses, more than double their representation in business leadership.

  • 99% of CDFI lending was based outside London.

‍Relationship-based approach

‍CDFIs take the time to understand applicants’ circumstances and provide tailored support to meet their individual needs. This enables a more holistic assessment of applications, taking into account the wider local context and circumstances.

By looking beyond the numbers, CDFIs can help customers make more informed decisions.

Many provide or facilitate wider support and local signposting alongside lending, including to grant programmes, as well as business support and mentoring.

Many also offer accessible, direct communication, often in person so customers can engage in an ongoing dialogue about their needs, circumstances and options to ask questions and receive guidance when they need it.

Wraparound support

CDFI support goes beyond lending itself. In 2025, they helped customers identify nearly £2 billion in unclaimed benefits, demonstrating benefits that extend much further than credit provision. And business-lending CDFIs provided more than 36,000 hours of pre- and post- investment business support in 2025.

By combining affordable finance and comprehensive support, CDFIs strengthen local financial inclusion and help ensure those who are often underserved by mainstream markets can access financial services and opportunities.