socialmedian: Letters: How to get credit flowing again

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Letters: How to get credit flowing again

Source: guardian.co.uk: The Guardian newspaper: Editorials & reply

Nov 07, 2009

Summary

The government's proposals to create three new banks could take four years and up to £40bn of taxpayers' money to achieve (Labour's great bank sell-off, 2 November). But in the meantime there is a far simpler step the government could take to get credit flowing again to small businesses and individuals who have been frozen out by the big banks. Community development finance institutions exist to help those whose finance needs cannot be met by the mainstream banking system. Last year these non-profit making bodies loaned £113m to people the banks were unwilling or unable to help. But CDFIs are poorly equipped to meet the current level of demand. A small proportion of the funds being channelled into the banking sector would be put to immediate use by CDFIs to create and protect many thousands of jobs in the communities worst affected by the recession.

Bernie Morgan

Chief executive, Community Development Finance Association

• I hope during the process of breaking up the banks, the chancellor considers a mutual model for ownership. Private housing finance was well-s

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