{"id":82,"date":"2013-02-28T18:49:08","date_gmt":"2013-02-28T18:49:08","guid":{"rendered":"https:\/\/alisonseabrooke.uk\/?p=82"},"modified":"2013-02-28T18:49:08","modified_gmt":"2013-02-28T18:49:08","slug":"how-community-investment-could-rebalance-the-uks-local-economy-february-2013","status":"publish","type":"post","link":"https:\/\/alisonseabrooke.uk\/?p=82","title":{"rendered":"How community investment could rebalance the UK’s local economy"},"content":{"rendered":"

The effects of the financial crisis on local communities<\/strong><\/h4>\n

The shock waves of the financial crisis are still being felt in our local communities. It is estimated that over four million individuals are\u00a0borrowing from lenders charging interest rates of between 450% and 2,500%. Surely it isn\u2019t right that dependence on quick, high-risk loans is becoming the norm for many lower income households, in the UK\u2019s most deprived communities?<\/p>\n

And how about the people running micro and small enterprises, who are struggling to access credit to enable start-up, expansion or job creation in their local areas? Not only is this running-down our local high-streets, but it is also hindering economic growth, since small and medium sized enterprises (SMEs) are vital for growth and job creation (they provide 60% of private sector jobs and half of private sector turnover<\/a>).<\/p>\n

Creating a new financial model<\/strong><\/h4>\n

Yet my reaction to these figures is not one of anger, (although I do understand the anger amongst those who feel poorly served by our economic institutions). No, for me, this has sparked an appetite for innovation: for the creation of a new financial system.<\/p>\n

Firstly, we need the banks to get themselves in order. Then we need to work in partnership with them to create new financial models, which meet the needs of all sections of society.<\/p>\n

In the UK we talk about the need for competition; in almost every sector we put in place legislation and regulation to ensure market diversity reflects consumer needs.\u00a0 Yet in the financial sector, the focus has been on creating frameworks to enhance competition at only one level; among the established and powerful banking institutions. In fact, the UK stands out among major European economies in the way that commercial banks dominate lending, with UK banks controlling 82% of our market.<\/p>\n

But in the UK we have a proud heritage of driving forward sector revolutions: from the industrial revolution to the internet. I believe the UK should be using its historical strengths to spearhead a financial services revolution.<\/p>\n

Looking to the Community Finance Sector<\/strong><\/h4>\n

Community finance, such as credit unions, coops or mutuals are real alternatives to the banks. In the USA, the community finance sector has experienced sustained growth since the strengthening of the\u00a0Community Reinvestment Act<\/a>\u00a0and the establishment of the\u00a0CDFI Fund by President Clinton<\/a>. In France, the community finance sector provides 55% of available lending. There is real scope here for us to learn from abroad and to use the community finance sector as way to bring about change.<\/p>\n

The Community Investment Coalition (CIC)<\/strong><\/h4>\n

My interest in this policy area has been sparked by CDF\u2019s work on fair access to finance, which has led us to join with a number of partners to form a\u00a0Community Investment Coalition\u00a0(CIC)<\/a>. The CIC influences changes to legislation, policy and local practice.\u00a0 It aims to change the narrative on the financial sector. And we\u2019re already seeing results.\u00a0 In response to highlighting the need for greater transparency across the financial services sector, the Government gave assurances that they would ask the banks to work with the\u00a0Treasury<\/a>\u00a0and the\u00a0British Bankers Association (BBA)<\/a>\u00a0to start work on\u00a0developing a framework<\/a>\u00a0for banks to publish disaggregated data about lending to SMEs.<\/p>\n

And at the CIC\u2019s first conference in January, we heard Dan Letendre, Vice President of the\u00a0Bank of America<\/a>\u00a0talk about his experiences of leading a team that solely lends to community development\u00a0finance institutions (CDFIs). He said it\u2019s been a long haul, but it\u2019s no longer extraordinary. It\u2019s mainstream. And I firmly believe that we should, and indeed can, aim for the same achievable goal here in the UK.<\/p>\n

– See more at: http:\/\/www.cdf.org.uk\/how-community-investment-could-rebalance-the-uk%e2%80%99s-local-economy\/#sthash.SuO8wUL8.dpuf<\/p>\n

Alison, spoke at the Westminster Social Policy Forum about rebalancing the UK\u2019s local economy.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The shock waves of the financial crisis are still being felt in our local communities. It is estimated that over four million individuals are borrowing from lenders charging interest rates of between 450% and 2,500%. Surely it isn\u2019t right that dependence on quick, high-risk loans is becoming the norm for many lower income households, in the UK\u2019s most deprived communities?<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[4],"tags":[18,32,51,56,60,72,75,93,96,107,124,127,166,192],"class_list":["post-82","post","type-post","status-publish","format-standard","hentry","category-cdf","tag-banks","tag-campaign","tag-community-finance","tag-community-investment-coalition","tag-community-reinvestment-act","tag-debt","tag-deprivation","tag-fair-finance","tag-financial-crisis","tag-high-risk-lending","tag-lending-data-disclosure","tag-local-economies","tag-smes","tag-westminster-social-policy-forum"],"_links":{"self":[{"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=\/wp\/v2\/posts\/82","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=82"}],"version-history":[{"count":0,"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=\/wp\/v2\/posts\/82\/revisions"}],"wp:attachment":[{"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=82"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=82"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alisonseabrooke.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=82"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}