With access to finance for small businesses remaining a hot topic, it is good to see the publication of a bank-supported, comprehensive, study of the marketplace.
‘Mind the Finance Gap’, sponsored by the RBS Group, has been produced by consultants Dr Nick Henry and Philip Craig of ICF GHK on behalf of the Community Development Finance Association (CDFA) and, I believe, makes many wise points.
The report covers the financial needs of private individuals and social enterprises, as well as small businesses, but I will focus on the latter as it is the area closest to my heart.
The headline figure of a gap of over £1.3 billion a year in provision of finance for micro and small businesses in the loans area up to £100K – a market space which enterprise-focused Community Development Finance Institutions (CDFIs) such as ART are well placed to fill – leaves plenty of scope for action. The report concludes that there are a number of challenges, which need to be faced, including:
- the requirement for joined-up action from policy makers, especially in raising awareness of what is available and where it is needed;
- the necessity of a partnership between public, private and social investors as the way to achieve success.
A comment that CDFIs are part of the group of intermediaries which connect with businesses ‘to do deals and provide services’ pulls together neatly what the sector is about.
Sadly, in my opinion, we are still seeing far too many examples of a wide range of activities and schemes covering grants, access to debt and equity finance, and business support that do not join up with each other, even when funding is received from the same source, for example Regional Growth Fund or European funding. I believe a huge difference would be achieved if joined up action could be top of the priority list.
You can download a copy of the report ‘Mind the Finance Gap’ from the CDFA website.
February 18, 2013 4:03 pm