Community finance is filling a gap in the market that the banks have created

ART is a not-for-profit Community Development Finance Institution (CDFI), which lends up to £50,000 to businesses — including social enterprises — in Birmingham and Solihull that are unable to secure any or all of the finance they need from the banks.  We were amongst the first such institutions to be established and our social mission is to support enterprise and jobs in Birmingham and Solihull by offering access to finance for viable small business projects.

To put it mildly, 2011 so far has been an unusual year.  In the months leading up to the end of the financial year, for the first time in our history, demand for loans was lower than supply, reflecting the fact that business confidence was at an all time low.  

But in the last six months since then we have lent more than in any other six month period in our fourteen year history.

This reflects the wider external climate. Banks are still not lending to smaller businesses — businesses which historically they would have been fighting over — and the kind of community finance we provide is filling a growing gap in the market.  The good news is that we have plenty of money available to lend for the coming year.

We also have a new and energetic Board. It’s great to see that even after fourteen years we can still attract top-notch people who want to help guide and support our work. This year Lowry Maclean, our chair for the past seven years, stood down and we are delighted that he is being followed by Craig Errington, Chief Executive of Wesleyan Assurance Society and the Institute of Directors’ national Director of the Year 2011.

Our vice-chair, Ian Clegg, has also ‘retired’ from our Board after long service. Ian, the retired regional director of NatWest, served on our Board right from ART’s inception in 1997. An existing director, Philippa Holland, OBE, retired Director of Government Practice at the Government Office for the West Midlands, has replaced him.

We are grateful to all of our Board members, of course, and particularly those like Lowry and Ian who have served us for many years and are now taking a well earned rest. But we are especially pleased that a new generation of people are coming forward to get involved in ART’s work.

Community finance has come of age and in the present economic and lending climate is arguably more important than ever. The most recent evaluation of community finance undertaken for BIS and the Cabinet Office in March 2010 found that CDFIs across the country have helped create 2,200 businesses and safeguard a further 1,650. Around 13,800 jobs have been created, and a further 12,800 safeguarded, and an estimated £667m of business turnover has been created.

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