Lloyds Bank backs new £62m community development fund
Lloyds Banking Group is making a leading investment in a new £62 million fund, named the Community Investment Enterprise Fund (CIEF), which targets small businesses in England and Wales that might otherwise be shunned by traditional lenders.
Lloyds Bank leads investment in CIEF
The CIEF has been launched to provide funding to Community Development Finance Institutions (CDFIs). CDFIs are non-profit lenders including community development banks, credit unions, loan funds and venture capital funds which service underserved communities specifically with small business loans, real estate financing and community development investments.
BCRS Business Loans, Business Enterprise Fund and Finance For Enterprise will become the first three UK CDFIs to receive capital from the CIEF, setting into motion the initiative’s ambition to support 800 small businesses and spur support for 10,500 jobs.
The fund is being managed by CDFI Social Investment Scotland (SIS), and along with the investment from Lloyds, has received additional financial backing from Big Society Capital (BSC) and participating CDFIs.
Responsible Finance, a membership body for CDFIs, and the Impact Investing Institute are also involved in the CIEF. The two firms are building a common data reporting framework and capacity building programme to enable recipients to further mobilise commercial investments.
According to data from Responsible Finance, CDFI-based financing is currently experiencing a positive growth trajectory, increasing 20% last year to £248 million, resulting in the creation of 2,570 new businesses and over 8,200 new jobs.
Describing SMEs as “the heartbeat of the UK economy”, Elyn Corfield, CEO of business and commercial banking at Lloyds Bank, explains that the CIEF will seek to support “deprived areas” while ensuring that recipients “have access to a range of financial options right for them”.
Alastair Davis, CEO of Social Investment Scotland, adds that since it was first launched five years ago, the CIEF has evidenced that “investing into under-served communities, and place-based approaches are both possible and credible”.
“This new phase, crucially, provides a continuity of capital and an opportunity to build on the good foundations already laid.”
