Social Inclusion through Microenterprise Development
Edited by Bárbara Jayo Carboni, Maricruz Lacalle Calderón, Silvia Rico Garrido, Karl Dayson and Jill Kickul
Chapter 1: The Microcredit Sector in the United Kingdom: The Role of CDFIs
Niamh Goggin, Karl Dayson and Sarah McGeehan As with many aspects of British life the development of microfinance was strongly influenced by the experience of the USA, especially the nomenclature, in which the term ‘Community Development Finance Institution’ (CDFI) is used to describe the broad social finance sector, rather than ‘microfinance’ or ‘microcredit institution’. The UK’s CDFIs have enjoyed extensive support from American CDFI practitioners and the sector has drawn on the USA policy experience. However, the UK has also been shaped by practitioners from Europe, particularly Poland (Copisarow, 2000), the developing world and indigenous pre-CDFI provision. This synthesis of perspectives led to a sector that has emerged in an environment with expectations of self-sustainability, while engaged in what American CDFI activists described as the highest risk activity within their model; namely enterprise finance.1 The reason for this apparent contradiction resides in the UK Government’s ideological commitment to Third Way politics (Giddens, 1998): a desire to address unemployment (social democratic impulse), while ensuring any solution does not ‘distort’ the marketplace (neo-liberal impulse). Consequently, the UK Government did not replicate the USA model of imposing reporting obligations on the banks. An irony of this outcome is that the UK now has a more neoliberal microfinance policy environment than a Republican-led USA Government. This chapter will explore how UK CDFIs have been established and adapted in response to national and more recently, regional policy. Although these policies may sometimes offer divergent objectives, enterprise, creation and encouragement of an enterprise culture has been...
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