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This post was authored by the Impact Investing Institute.

  • Lloyds Bank becomes first mainstream lender to invest in CDFI sector
  • The facility is the second phase of the Community Investment Enterprise Fund (CIEF)
  • Half of businesses accessing the fund will be in the most deprived areas of England and Wales

4 March 2024 – A £62 million investment fund has been launched to help small businesses across England and Wales access finance to support local jobs and economic activity. The Community Investment Enterprise Fund (CIEF) aims to invest in around 800 small businesses, supporting around 10,500 jobs.

The Fund will initially invest into three Community Development Finance Institutions (CDFIs) – BCRS Business Loans, Business Enterprise Fund and Finance For Enterprise. CDFIs are socially motivated lenders which already lend around £100 million every year to creditworthy businesses which traditional and challenger banks, and fintechs cannot serve. They lend disproportionately more to businesses led by women, ethnic minority entrepreneurs and almost 50% of CDFI lending is to areas in the UK’s most deprived regions¹.

Funded by Lloyds Bank, Big Society Capital (BSC) and with contributions from the participating CDFIs, CIEFwill provide the CDFIs with the capital they need to meet growing demand from small businesses.

In taking a leading role, Lloyds Bank has become the first mainstream lender to invest in the CDFI sector, underlining its commitment to investing in sustainable business and regional development including within disadvantaged areas of the UK.

The fund, which follows on from a successful first phase of funding, will continue to be managed by Social Investment Scotland (SIS), which has been investing in the social sector since 2001 and is itself a CDFI. Responsible Finance and the Impact Investing Institute have both played a key role in bringing this second phase to fruition² along with the three participating CDFIs.

One such small business to have received funding from the first phase of CIEF is Newcastle-based tea merchant Estate Tea Company, founded by local entrepreneur Tom Webb, which specialises in single estate, small batch and hand blended teas. The business supplies its teas to cafes, restaurants and hotels across the UK, as well as operating its own cafe and eatery in Newcastle. Funding from CIEF, via CDFI Finance For Enterprise, enabled Tom to relocate from a small café in Gateshead to a larger former plumber’s merchant which he has transformed into a day-night haven for tea lovers. Since opening the new venue, the business has increased its trading hours, creating several new local jobs. Funding has also supported the expansion of blending facilities and an increase in customers stocking its tea range, from approximately 50 to over 80.

Elyn Corfield, CEO Business and Commercial Banking, Lloyds Bank, said: “Small and medium size enterprises are the heartbeat of the UK economy and as the largest domestic banking group, we have a proud history of supporting UK businesses to thrive. We’re therefore delighted to support the CDFI sector to back local businesses, with a focus on deprived areas, and ensure they have access to a range of financial options right for them. When local businesses flourish so do local communities and we hope our leadership within this second phase of CIEF will see many more areas of the UK succeed.”

Alastair Davis, CEO, Social Investment Scotland said: “What we have achieved through CIEF since its launch five years ago provides evidence 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. It is particularly heartening to see that funders are demonstrating a long-term commitment to the CDFI sector as a key channel for connecting capital with the communities who need it most. In collaboration with our partners, we are confident that CIEF can make a huge difference to people’s lives and livelihoods, at a time when many households are struggling with the cost of living and volatile economic conditions.”

Anna Shiel, Chief Investment Officer, Big Society Capital said: “At Big Society Capital we care deeply about building fair opportunity through expanding the reach of investment into communities and supporting access to a more diverse set of business owners. Like the small enterprises they serve, the dedication of CDFIs to create long-term impact deserves greater backing. The combination of their hard work, and vital tools such as the Recovery Loan Scheme guarantee, has unlocked the potential to draw in more capital from institutional investors such as Lloyds, whom we are delighted to co-invest with in this fund. We are thrilled to see the work of partners come together in the next stage of CIEF and especially to see how the positive track record of these CDFIs is being noticed!”

Kieron Boyle, CEO, Impact Investing Institute said: “We are seeing increasing momentum in support of CDFIs, who play a critical role for people and enterprises that are not well served by mainstream banks. Historically, one of the main challenges has been the lack of investment at scale into CDFIs so that they are able to support more small enterprises across the UK. It is great to see Lloyds become the first commercial bank to show long-term commitment to the sector and invest in CIEF. Increased access to capital will ensure that they continue to reach underserved people and places, boost economic growth, promote employment creation, and reduce inequality. This is a landmark moment for the sector which we hope will pave the way for other mainstream banks to invest in CDFIs.”

Theodora Hadjimichael, CEO of Responsible Finance which represents the UK’s CDFIs, said: “Wherever they live, entrepreneurs need the right finance at the right time to develop their businesses. Yet many viable businesses based outside London or led by people from an ethnic minority background or by women, struggle to access the finance they need to grow. Lending from the UK’s CDFIs is meeting this gap, creating thousands of thriving businesses and banks’ future customers.

“We are thrilled to welcome Lloyds Bank’s commitment to our sector and the small businesses we serve, alongside BSC’s valued longstanding support. As we announce this historic investment, we urge other mainstream banks to join Lloyds. We call on Government to extend the Recovery Loan Scheme (RLS) which has proven so effective at unlocking finance for SMEs. RLS is a crucial way for securing investment like this and channelling it to underserved but viable businesses.”

Ends                                                                                       4 March 2024

For more information, interviews or case studies please contact:

Jamie Veitch on behalf of Responsible Finance: / 07904 272 200

Libby Keiller on behalf of Social Investment Scotland: / 07714 285202


  1. The British Business Bank (BBB) 2022 Nations and Regions Tracker
  2. Responsible Finance and the Impact Investing Institute are currently working on growing the CDFI sector’s presence in the UK by mobilising further commercial investment as well as addressing some of the key challenges faced by CDFIs. This includes delivering a capacity building programme to better prepare CDFIs to scale and take on more investment, and a feasibility study to build a common data reporting framework for the sector.

About Lloyds Bank

  • Through our Lloyds Bank and Bank of Scotland brands, we are proud to be by the side of British business, supporting over 1 million UK businesses with leading digital and relationship banking services, as they start up, grow, thrive and trade internationally.
  • Through a network of relationship teams based across the UK, as well as internationally, we deliver a mix of local understanding and global expertise necessary to provide long-term support to our clients to help them fulfil their growth aspirations.
  • We offer a broad range of finance beyond term lending and this spans import and export trade finance, structured and asset finance, securitisation facilities and capital market funding.
  • Our product specialists provide bespoke financial services and solutions, including tailored cash management, international trade, treasury and risk management services.

About Social Investment Scotland

Social Investment Scotland was established in 2001 to provide a new finance model for Scotland’s charities and social enterprises. Since then it has invested over £133 million. Loan finance via Social Investment Scotland is available from £10,000 to £1.3m and is aimed at community enterprises and social businesses that might find access to finance from mainstream providers difficult. Social Investment Scotland also helps to manage funds on behalf of third parties with any profits being re-invested into social business development in Scotland.

About Big Society Capital

  • Big Society Capital is the UK’s leading social impact investor. Our mission is to grow the amount of money invested in tackling social issues and inequalities in the UK. We do this by investing our own capital and helping others invest for impact too.
  • Since 2012, we have helped build a market that has directed more than £9 billion into social purpose organisations tackling issues from homelessness and mental health, to childhood obesity and fuel poverty, a ten-fold increase in ten years.

About the Impact Investing Institute

The Impact Investing Institute is an independent, non-profit organisation with a vision of transformed capital markets for a sustainable future, where impact investing is an effective tool for deploying capital. We work with investors and their advisors to move more effective capital for the benefit of people and the planet, and we advocate for regulatory and policy environments that support that goal

About Responsible Finance

Responsible Finance represents the UK’s Community Development Finance Institutions, ‘social purpose’ lenders which serve people, businesses, social enterprises and communities excluded from mainstream finance. Last year their total lending increased by 20% to £248m, and they:

  • Lent £81m to 3,230 start-ups and established small businesses, creating 2,570 new businesses and safeguarding and creating 8,120 jobs
  • Lent £117m to 416 social enterprises, safeguarding and creating a further 103 jobs
  • Helped households save £28m in interest they would have paid to a high-cost lender, by lending £46m to 90,630 people.

More details:

About BCRS Business Loans

BCRS Business Loans is a co-operative run on a non-profit basis, owned and run by Member Investors who elect representatives to the Board of Directors at each Annual General meeting. Established in 2002, BCRS is committed to lending to viable businesses making a positive contribution to the social, environmental or economic wellbeing of the West Midlands and Wales that have been unable to secure funding through mainstream lenders. As a Community Development Financial Institution its purpose is to provide access to finance to enable local businesses to grow and prosper. Find out more:

About Business Enterprise Fund

The Business Enterprise Fund (BEF) provides loans from £500 to £250,000 to businesses, helping them begin, expand, and flourish.  

BEF is a Delivery Partner for the Government’s Start Up Loans Programme which supports emerging and young businesses with finance and support. BEF, alongside FFE, deliver the Northern Powerhouse Investment Fund’s Microfinance Loans across Yorkshire, Humber and the Tees Valley, a fund delivered by the British Business Bank.

As a social enterprise and a Responsible Finance Provider, BEF’s profits are reinvested into the loan fund and granted to organisations that encourage and build enterprise. Over the last 11 years BEF’s has invested £108m in lending, added £392.4 million of value to the region’s economy, and created or safeguarded 13,140 jobs.

About Finance For Enterprise

Finance For Enterprise is a registered lender under the Recovery Loan Scheme and has been supporting viable SME businesses with loan finance since 1985. 

Finance For Enterprise helps businesses across England to achieve their ambitions. Financial support is tailored to meet the unique needs of each borrower SME, helping them to improve liquidity, facilitate growth or purchase assets. Loans of up to £250,000 are available and can be accessed by businesses in all sectors.

Finance For Enterprise Limited is authorised and regulated by the Financial Conduct Authority (FRN 718612). Information Commissioner Office Registered (FRN: Z153621X).