A fund to support households with rising costs and debt has been boosted with a £900,000 investment from one of Britain’s largest banks Natwest.
The money will go to social enterprise Responsible Finance to help community development finance institutions (CDFI’s) to support people in avoiding loan sharks and save money.
This latest investment is part of a £5.7m hardship fund to support charities like anti-poverty organisation the Trussell Trust, the debt advice sector and the Federation for Small Businesses.
Funding will allow CDFI’s to provide small loans and grants to support vulnerable households which are struggling with bills and inflation.
It will also provide accessible credit which can save customers £200-£300 in interest compared to the alternatives available, as well as financial advice and education to support households in gaining financial resilience.
Theodora Hadjimichael, Chief Executive of Responsible Finance, said: ‘The cost of living crisis is pushing millions of people whose circumstances mean they can’t borrow from mainstream lenders towards loan sharks and very high interest lenders. Affordable, fair credit has never been more needed, and Responsible Finance providers improve their customers’ financial resilience, not only with credit but by helping them strengthen their finances even if they cannot offer them a loan.
‘Community development finance institutions’ (CDFIs’) customers typically borrow around £500 or less and make small amounts of money go a long way. Our members will ensure this welcome support from NatWest goes where it is most needed to help more people improve their financial resilience.’
Customers seeking support from CDFI’s doubled last year and reached 67,000, but this exceeds the amount of capital these organisations have available for lending.
The Financial Conduct Authority, MP’s from the three main political parties, the Centre for Social Justice and the Joseph Rowntree Foundation have called for extra support to expand CDFI’s so they can better support those in need.
Photo by Eduardo Soares
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