Government Outlines Support For Microlenders

Fri, 17 Dec 2010

The government has announced reforms to the Enterprise Finance Guarantee (EFG) scheme, which are aimed at promoting micro-lending to small firms in the UK.

Speaking to the Community Development Finance Association (CDFA), Business and enterprise minister Mark Prisk said that access to the EFG scheme, which guarantees 75 per cent of the value a small business loan, will increase for community development finance institutions (CDFIs), which typically make more risky investments than other lenders .

He also said he is issuing new guidance to allow (CDFIs) to take advantage of a "little-used" element of the scheme, which community lenders from the usual 2 per cent premium charged by the government for its guarantee .

Prisk also urged CDFIs to bid for funding from the government’s new Regional Growth Fund and invited them to get involved with the development of its Big Society Bank .

He said: "I want to encourage people from all backgrounds to start their own business. CDFIs are extremely important in supporting business in communities that need a boost in enterprise and economic growth."

"With changes to the EFG and our continued work on the Big Society Bank and Regional Growth Fund, new opportunities are opening up for CDFIs to increase their loan base. CDFIs are well positioned to make strong bids for RGF support in line with the objectives of the fund."
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