Select Committee on Treasury Written Evidence


Memorandum submitted by the Community Development Finance Association

  The Community Development Finance Association (cdfa) is the UK trade association for community development finance institutions (CDFIs). CDFIs are independent financial institutions. They provide capital and support to enable individuals or organisations to develop and create wealth in disadvantaged communities or under-served markets. The cdfa's mission is to support the development of a thriving and sustainable community development finance sector that provides finance for disadvantaged and underserved communities and, as a consequence, contributes to the increasing prosperity of these communities.

  The cdfa believes that savings, within the context of a holistic approach to eradicating financial exclusion, have a major role to play in supporting the welfare of disadvantaged individuals and groups, as well as in building financial capability within such communities. Disadvantaged geographical communities and groups need the opportunity to build cohesive, sustainable communities and communal and personal savings schemes can provide this opportunity for many of them. Our analyses of the financial needs of these groups have found that they consider savings more important to the alleviation of their difficulties than other products, such as insurance. They consider the following factors, in the following order, to be barriers to their financial well-being:

    —  No savings

    —  No current account

    —  Difficulty in accessing affordable credit

    —  No home buildings insurance

    —  No home contents insurance

    —  No credit card.

  Financial exclusion cannot be overcome by tackling any single one of these barriers. The government's financial inclusion strategy should address each of the above matters both as an individual factor and as an element of the whole financial exclusion issue.

April 2007





 
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