An economic impact tool for the community finance industry
Community Development Finance Association
Community finance delivers innovative financial products for businesses, social ventures, individuals and households unable to access finance from mainstream.
The Community Development Finance Association (CDFA) and its membership are strongly committed to expanding the impact of such ‘fair finance’ in the economy and society. A key requirement remains comprehensive, consistent, robust and relevant reporting of the value of economic and social impacts of community finance to funders, investors and the broader stakeholder community.
The aim of this project is to create a (very) easy to use methodology and tool for the community development sector that allows a consistent, robust and real time ability to report the value of the economic impacts of community finance lending.
The core methodology has comprised a series of workshops with sector Impact Champions to agree the key economic and social impacts of community finance, how they are measured and the data capture requirements for organisations to report against these.
Given this material a tool has been constructed – drawing from the most robust evidence base (principally government published studies) – to calculate broad brush values for the economic impacts of the different lending activities of CDFIs. On this basis, the full economic and social value (and return on investment) of community finance can be detailed.
The tool has generated substantial interest amongst stakeholders. An initial Stakeholder Roundtable hosted by Citibank has been followed by one hosted by the Department for Communities, and Local Government (DCLG) and attended by Treasury, the Cabinet Office and Office for Civil Society.
The tool has been designed specifically to act as a ‘living tool’ – allowing expansion and update as new research and reports enhance the evidence base upon which it is based.
The tool is in the process of roll-out to the membership of the CDFA.