Briefing Note


A Recent research by Community Finance Solutions assisted in gaining an
  understanding of the nature of local financial exclusion, including need, issues
  concerning existing provision, preferred services and delivery.

B Financial exclusion exists within concentrated pockets of intense multiple
  deprivation, and among excluded groups in Bristol and in the surrounding
  unitary authorities. Research has found it mainly involves difficulties in
  accessing services offering credit, banking, savings, and financial advice and

C A review of existing provision shows that needs are not currently met in Bristol
  and the surrounding area: although there are a number of small initiatives,
  provision of personal finance services/products is limited in coverage;
  fragmented; and under-resourced. In some areas this may reinforce financial
  exclusion as people become vulnerable to money lenders and other exploitative
  financial services.

D There are a range of agencies providing enterprise support, but in some cases
  these are overlapping or poorly targeted services. In particular, agencies didn‟t
  fully understand or meet the needs of micro-entrepreneurs.

E. Personal financial exclusion also impacts on the wider local economy and can
   undermine broader regeneration efforts. Personal finance and enterprise
   interventions need to be better integrated to ensure micro-entrepreneurs are
   targeted, as they are not served by “business” financial services.

F. The research found clear agreement that something needs to be done to better
   address financial exclusion - the “do-nothing” and “new CDFI” options were
   rejected. A “preferred option” has emerged that essentially involves the
   development of a CDFI that builds on existing organisations and proposes
   complementary support mechanisms.

G While there are a number of models available for a CDFI, the incremental
  development of a CDFI is suggested as the best mechanism to address the
  issues highlighted during this project. It would build on existing agencies but
  require agreement of a strategic framework and considerable change.

H Discussions of the option have indicated there is a desire for a partnership
  approach, which will utilise existing organisations, some of whom operate on a
  West of England basis. These include the major private and community based
  finance enterprises, and Business West. Others could improve their services
  and sustainability by developing a wider market or partnerships.

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1.    This note summarises the research and consultation that has been carried out as
      part of wider Community Finance work that aims to identify feasible and sustainable
      mechanisms for the development and delivery of Community Development Finance
      solutions in the Bristol area. It draws on the key reports prepared by Community
      Finance Solutions of the University of Salford (these reports are available on the
      internet:, who were commissioned
      in 2002 and conducted the research using a collaborative participative approach from
      the beginning. The findings summarised in this briefing note therefore have wide
      "ownership" among local "social actors" who participated in a series of learning
      sessions, presentations and interviews over four "events" in late 2002 and 2003.
      Details of the project are included in Appendix 1.

2.    The findings of this research form part of a wider West of England Strategic
      Partnership (WESP) initiative co-ordinated by the Bristol City Council in partnership
      with the Regional Development Agency and the four adjacent local authorities. The
      findings also reflect national policy, including changes to legislation affecting credit
      unions and changes in the tax regime to support Community Development Finance
      Initiatives. The research offers scope to incorporate new and innovative mechanisms
      emerging from across the country to address local community finance issues. The
      CDFI and its variants are the subject of a national pilot programme and they are
      among a number of community finance interventions and initiatives which also
      include credit unions, peer lending, soft loan funds, equity funds and reinvestment
      trusts. These are summarised in Appendix 2.


3.    Community Development Finance Institutions (CDFI)- the Community
      Development Finance Association (CDFA) defines CDFIs as "new financial tools for
      social, economic and physical renewal in under invested communities. They lend and
      invest in deprived areas and underserved markets that cannot access mainstream
      finance. They are sustainable, independent organisations that provide financial
      services with two aims: to generate social and financial returns. They serve different
      types of customers with loans or equity investment, including individuals, micro-,
      small and social businesses."

      For individuals, in addition to Credit Unions, advice and finance education initiatives
      there are options such as Community Reinvestment Trusts, which provide affordable
      loans, and advice, as alternatives to moneylenders and loan sharks. For business it
      provides access to finance which would normally be closed to them.

      As institutions they are able to access substantial public and private funding, which
      they can manage in a range of ways to directly meet local needs and/or support and
      improve the range of existing services and their accessibility to those who may
      experience financial exclusion in some form. CDFIs were first established in the early
      1990s and now have their own co-ordinating organisation, the Community
      Development Finance Association (CDFA). While research has shown what factors
      may influence success of an CDFI there is no prescription and local circumstances
      tend to determine what is best for that community.

4.    Community Finance Initiatives (CFI) are generally small scale initiatives that meet
      a more narrow but similar need in the community. They vary considerably from, for
      example, a loan guarantee fund in partnership with a mainstream financial institution,
      to a financial literacy/education project provided through local colleges, to Credit

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      Unions, to a loan fund operated by a local agency. As they are often set up within
      another institution or as part of a specific regeneration programme they may not need
      to be financially viable- but this may also mean they are narrowly targeted and may
      be constrained by the need to meet other objectives. In Bristol there are many CFIs
      successfully meeting many local needs, but they have not yet been drawn together or
      developed in the context of an integrated strategy. A question underlying this note is
      whether a CDFI might be a suitable mechanism for delivering these types of financial
      service and support in a more integrated way.


5.    The scale of general deprivation in parts of Bristol is well-documented and has been
      the focus of regeneration initiatives since the mid-1990s. In the surrounding areas
      there are pockets of deprivation that have more recently been identified and are now
      the subject of local initiatives. Specific measures to address financial exclusion have
      only gradually been developed as more information has become available regarding
      the scale and nature of personal financial exclusion; often it has been a "hidden" and
      unmeasured issue.

6.    Baseline information collected for Bristol regeneration areas highlighted both the
      issue of debt and the difficulties of obtaining credit and maintaining loan repayments.
      The statistics mirror national research (primarily Kempson et al (2000)) that found
      that mainstream services and products did not address need, and that financial
      exclusion resulted from barriers to accessing financial products and services that
      went beyond the difficulty of reaching a bank branch. Key barriers were found to be:

          Exclusion through the cost of the service relative to the income
          Exclusion by ignorance of where to obtain services
          Self-exclusion by people who believe they will be refused financial services or
           who may not wish to engage with financial institutions

7.    These barriers, along with the closing of local bank branches, means that
      moneylenders are able to move into this area of personal finance. Those involved in
      debt advice have found that there are many examples of companies taking
      advantage of the vulnerability of local residents - one example being a shop in Bristol
      charging 777% for a 20 week loan of £150. Research carried out as part of this
      project found that Provident offered £500 loan at 497.4% (£23 a week over 23
      weeks) or 170.7% (£15 per week over 54 weeks). The lack of regulation of these
      organisations is a concern as, in addition to these excessive interest rates, they do
      nothing to address the underlying pattern of debt.

8.    Another trend is that second mortgage companies are now more common, taking
      charges on property and on businesses in the case of sole traders. Credit card debt
      is also an issue, particularly as the desire to protect credit rating often results in
      payments on credit cards having priority over the payment of basic bills. Debt
      advisors are concerned about the inability of existing agencies to meet the need for
      debt advice, particularly as this may result in clients turning to professional debt
      advisors who charge for their services and push clients towards remortgaging.

9.    Previous studies by the University of Bristol and Joseph Rowntree Foundation with
      residents in Barton Hill, Bristol (Collard et al, 2001) identified particular personal
      finance issues linked to financial exclusion (over and above low incomes resulting
      from nature of occupations or caring responsibilities):

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    Bank accounts: there was widespread mistrust of banks, insurance and credit
     companies; wanted bank accounts that were easy to access, and to understand how
     to use accounts to avoid bank charges

    Personal credit: access to credit was difficult - small loans refused; unsure whether
     individuals blacklisted or the area; tendency to use expensive forms of credit;
     tendency to borrow for day-to-day living expenses

    Credit for micro-entrepreneurs: there were barriers to getting credit for working
     capital for micro-entrepreneurs because banks saw them as "businesses", but they
     saw themselves as just "working for themselves" and avoided "business" planning

    Inability to obtain financial services: that comply with Islamic law

    Savings: found it difficult to get started; also difficulty of accessing savings accounts
     that welcomed small deposits

    Access to insurance: home contents insurance in particular was problematic

    Advice: difficulty of getting simple and independent explanations of financial services,
     or of getting a source of trusted and independent money management information

10.   The mechanisms for delivery of services and products need to be more co-ordinated
      and linked into mainstream provision. Residents in Barton Hill suggested the

         One stop shop – i.e. single place for delivery of a range of financial services
          including money advice, financial literacy training, savings, loans, etc.
         A service that allowed linkage into mainstream financial services and which could
          be accessed if they moved from the area
         Local outlets
         Partnerships with existing local providers such as the post office
         Sustainability in the sense that it would last and attract other funding

11.   A key finding is that barriers to personal finance affect both the household and the
      wider economic activity of the area. This stems from the fact that for many in these
      communities, such as those working on the margins of the formal economy or
      struggling to generate an income through self-employment, finance is not
      compartmentalised into personal and business. These „micro-entrepreneurs‟ do not
      differentiate between business and personal income and expenditure and do not feel
      banks or business advisors have anything to offer them, although they are interested
      in the micro-lending scheme Street- UK (a large micro-credit initiative which has
      developed from a lending circle to providing individual loans).

12.   Barriers to personal finance also act as barriers to micro-entrepreneurship and must
      be addressed (along with business finance) if an increase in micro-entrepreneurship
      is sought as an important contributor to regeneration. Local delivery needs to be
      supported at a macro level so that efficiencies of scale can be achieved to develop
      effective back office support services and access capital and financial expertise to
      provide the required range of services.

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13. The research reviewed the supply of existing community finance initiatives in the
    subregional area and these are summarised in Appendix 3. Overall there is uneven
    and uncoordinated coverage by community finance initiatives in the West of England,
    with the main issues emerging from the point of view of supply being:-

         Fragmented provision and absence of co-ordinated policies and strategies:
          the benefits of individual initiatives would be maximised by working within a
          framework that relates to a wider strategy. Bristol Means Business is starting to
          address this issue in relation to business support, but within the personal debt
          advice service linkages are patchy and voluntary contribution underutilised.

         Personal support is under resourced - greater supply and resources are
          required to meet demand, particularly in respect of debt and related advice.

         Enterprise support suffers from a multiplication of agencies - with some
          agencies not meeting target audiences or providing the type of support needed by
          potential clients e.g. micro-entrepreneurs. In some cases there may be over-
          provision of agencies, particularly for enterprise loan funds that are underutilised
          for a range of reasons.

         Need for monitoring of referral services within networks and for information
          sharing and closer relationships.

         Few programmes offering financial literacy courses.

         Not-for-profit financial services (e.g. credit unions) - only available to a limited
          number of areas and those outside these areas have limited choice for credit.
          Credit Union volunteers have difficulty managing expectation and overcoming
          problems, such as those related to registration. More paid staff needed.

         Likely need to develop alternative forms of loan finance for housing repairs
          as grant regime changes.


14. The research also looked at what might be changed to better meet identified need in
    terms of products and services, and this can be summarised as:

         New services: there is evidence of need for new services/products/delivery
          mechanisms that meet local need. For example, the Woodspring Deposit
          Guarantee Scheme for tenants, and loan products that meet the needs of the
          Islamic community who cannot pay interest on loans. Some consider a CFI needs
          to provide access to mainstream financial Providers at local level

         Credit Union services: there is widespread support for development of Credit
          Unions, but some concern that too much is expected of relatively small and new
          institutions. They may not be the most effective way of meeting the needs of
          residents with multiple indebtedness, who need help and support, not necessarily
          credit. Credit Unions need greater coverage and could broaden their role;
          currently supported by BACEN. They wish to develop separately while
          undertaking joint promotional activities, i.e. achieve a strong local identity before
          merging into a Bristol-wide entity (ambition to merge in 2008). BACEN are also

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          developing closer links to the Bristol Debt Advice Centre (BDAC) so that money
          management advice can be offered; disappointed that bid to involve debt
          advice/money management unable to secure Objective 2 funding.

         Debt Advice: there is a clear need for more access and linkages to debt advice
          and financial literacy courses. A useful step would be to increase exchange of
          information through Avon network of advice services (Advice Centre for Avon),
          which has 35-40 members (Citizens Advice Bureaux, Refugee Action, etc.), but
          also partnerships and pilot projects.

         Micro-enterprise support: this is a „gap‟ in the market as micro-entrepreneurs
          are less likely to have a bank account; low income makes it difficult to repay
          debts; absence of savings limits working capital and access to loans (no security).
          They are best served by CFIs, as CFIs would be close to clients and their not-for-
          profit basis means they could also „nurture‟ clients. There is an absence of
          understanding of potential clients for whom personal and business finance are
          closely inter-related, and associated lack of appropriate advice and support for

         Revised delivery mechanisms: are needed in conjunction with other
          improvements to ensure accessibility (inclusion) and sustainability, e.g. one-stop
          shop, ensuring link between personal and business finance and offering all
          services at a local centre but linked into a service that was available city

15.   The research highlighted the inter-relationships between services/products and need
      for a financial inclusion strategy to achieve greater integration and effectiveness.
      Whatever the precise form of the final mechanism, there were some essential steps
      and changes in approach that were agreed as being needed to realise the potential
      of existing initiatives to meet the agreed objectives. These are:-

             Establish partnerships
             Broaden remit of some organisations
             Greater integration - collaboration and possible merging
             Leading agencies will need to give up some autonomy
             Jointly developing services
             More efficient back up resource for Credit Unions
             Links with national/mainstream financial organisations to tap their potential


16.   The plenary event in March 2003 considered the findings of the previous research
      and presentations and reviewed the following options:-

       DO NOTHING - The cost of this option for the local economy could be considerable,
        as it would undermine support for local shops and local businesses, and adversely
        affect local employment and overall economic development objectives.

        DEVELOPED SERVICES - maximise the delivery of existing organisations through
        provision of extra resources, product development, co-ordinated databases, joint
        development, tapping into the potential of mainstream banks, co-ordination of
        personal finance advice agencies, promotion and closer working of loan funds and
        improved signposting between agencies. This option could incorporate the creation

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       of a Bristol-wide live and work credit union before 2008 to provide wider
       coverage/better access, or incorporate the „Back Office Service Delivery Vehicle‟
       outlined below to support and complement the existing credit unions.

        secondary organisation with paid professional officers that can supplement and
        complement local credit unions and reduce the cost of administrative activities
        including specialist software. It could also support loan fund organisations and co-
        ordinate product development, though issues of accountability have to be overcome.

        broad based (Bristol and surrounding areas) CDFI that brings together existing loan
        funds and encourages closer partnership with and between credit unions. It would
        be able to offer loans that existing organisations find difficult because they are too
        small or because of legal constraints or difficulties in offering secure loans or loans
        to high-risk clients. It would also be able to link in advice services and bridge the
        gap between personal and enterprise finance. This option offers advantages of
        scale, ability to fill gaps in service provision, clear lines of accountability and ability
        to attract substantial funding such as the Phoenix Fund, as well as take advantage
        of other public and private resources. Requires mergers of existing agencies and
        establishment of more partnerships. This option forms the core of the recommended
        course of action, which has developed from the research and consultations
        undertaken by Community Finance Solutions.

       CREATE A COMPLETELY NEW CDFI - establish a new CDFI with no account
        being taken of existing provision and which can focus on the achievement of a
        financial inclusion strategy.

17.   The clear message was that the “Do Nothing” option should be rejected as it was
      concluded that the situation was too important to ignore even if identifying resources
      could be a challenge. Similarly the creation and imposition of a new CDFI was
      dismissed, as it was considered this would undermine existing commitment and

18.   There was also a view that a sub-regional approach offers an effective and efficient
      means to reach a greater proportion of the population within the region- this would
      allow economies of scale and be attractive to investors. Furthermore, the proposal
      should address the needs of potential customers and other stakeholders as a priority
      over concern for the professional or agency boundaries that are relevant mainly to
      the funding package.


19.   A preferred option was developed as the basis of future discussions (further details
      are located in CFS document “Report on the first stage in the possible creation of a
      sub-regional project for a locally based CDFI for the West of England Strategic
      Partnership area” pp42-51, which can be found on It aims to develop a more strategic
      and co-ordinated approach using components of the three other options and moving
      forward in stages to incrementally achieve a sub-regional CDFI that makes best use
      of existing initiatives. The preferred option broadly comprises:

20.    Infrastructure developed on a sub-regional basis
         Expand Bristol Means Business Partnership to cover wider area - needs strategic
          investment and additional support agencies for micro-enterprise.

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        Create new partnership: a personal finance equivalent of Bristol Means Business,
         over wider area to embrace existing organisations in a more co-ordinated and
         strategic approach (will require revenue support).
        Create new delivery „vehicle‟ - the secondary back office service delivery agency
         (described under „options‟ on page 48 of main paper), which will reduce costs and
         enhance capacity through shared resources; would help creation of a Bristol-wide
         Credit Union and encourage greater involvement of local authority employees in
         Credit Unions.
        Create CDFI through incremental integration of existing business and social
         enterprise loan funds - to create more capacity and other services and increase
         prospect of sustainability.


    Set up a team of relevant stakeholders to develop and oversee strategy.
    Promote this work with a "Champion" through management structures of other
    Gain support of the relevant local authorities and Regional Development Agencies.
    Set up the above infrastructure incrementally and build on existing agencies It sets out
     a process that ultimately would achieve an CDFI based on the existing providers, but
     ensuring their local knowledge and experience was built on to develop a mechanism
     that addressed the needs and suggestions as emerged through the project.
    Develop personal lending activity concurrently with expanding the business loan
    Pilot a 'one-stop-shop‟ approach to savings, current accounts, basic credit facilities,
     debt consolidation, independent financial advice and insurance based on identified
     local need - through a CDFI in conjunction with a mainstream bank and local
     partners; extend this to other areas in due course.
    Once a sub-regional CDFI is established, it needs to develop new products (e.g. for
     tenants and for the Muslim community) and low cost loans and equity release
     products (for homeowners on low incomes and the elderly).
    Provision of financial literacy courses.


    Community a Heart New Deal for Communities programme, Lloyds TSB and Bristol
     Enterprise Development Fund (BEDF) act as core implementation partners working
     with local authorities to resource a project development team over 2 years
    Engage others in developing and piloting the personal finance services and housing
     lending products as listed above, particularly ABCF and CEED, BEST and BACEN
     (and Bristol Care and Repair)
    Cascade these activities to other recognised regeneration areas (e.g. where
     regeneration funding is available). (Note: Home Loan Scheme will be extended more
     quickly under other initiatives)
    Strategic decisions are needed as to funding and resource contributions; the
     indicative funding implications have been set out in the original CFS report (ref)

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APPENDIX 1: Financial inclusion project and details of the Scoping Research

1. Community Finance Solutions (CFS) at the University of Salford were appointed by
   Bristol City Council in 2002 to carry out research to identify feasible and sustainable
   mechanisms for the development and delivery of Community Development Finance
   solutions within the sub regional boundary of the four Unitary authorities of Bristol, Bath
   and North East Somerset, North Somerset and South Gloucestershire. This project
   was part funded by the South West England Regional Development Agency, under it‟s
   INTER programme. It was overseen by an advisory group of local authority
   representatives, key community based finance advice agencies, credit unions and

2. The West of England Strategic Partnership provided an overall umbrella for this work,
   bringing together the local authorities, to co-ordinate and review work, and provide a
   home for the launch seminar

3. Reports from the scoping research consultancy have now been published on the
   Internet: Other outputs include a review of national
   research on financial exclusion and the development of CDFIs and a resource pack on
   Community Finance Initiatives. During the process the project team held 3 invited
   seminars consisting of presentations by leading practitioners from around the country
   as well as analysis of key issues that need to be considered when dealing with
   financial inclusion. A plenary event was held where learning and options developed
   during the programme were presented and discussed. More than 40 community based
   finance initiatives as well as statutory agencies and finance houses attended these
   events from the West of England region.

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APPENDIX 2:            National Policy Context and CDF Initiatives Elsewhere
[For detail please see the Community Finance Solutions Resource Pack, available on the
internet at: under West of England CDFI, Plenary Event
31 March 2003)


Glasgow, Birmingham and Liverpool led the implementation of CFIs and Credit Unions in
the UK in the early 1990s, but the development of CDFIs was given a national boost by the
creation of the Local Investment Fund in 1994. When Labour gained power in 1997
priorities shifted towards tackling social exclusion and included policy development on
CDFIs in relation to personal finance and enterprise. In particular Credit Unions were
given greater freedom and an increased role, though their development since then has
been patchy.

More generally, the policy shift supporting CDFIs recognised their role as a bridge between
deprived communities and mainstream economies, as well as a mechanism to improve
sustainability of regeneration initiatives through increased loan financing as compared to
grant funding. CFIs have been encouraged by the creation of the Phoenix Fund (1999)
which offers capital support, development funding and loan guarantees.

There has been a strong growth in CDFIs although there are still some issues to be
resolved. More research has helped identify ways of addressing these issues and also
identified factors that appear to be crucial to “success” such as the scale, coverage,
linkage with community, independence and sustainability of the CDFI. These issues were
discussed during the project.

Nationally, the Treasury has introduced a new tax regime to specifically support
Community Development Finance Initiatives. The Bank of England and clearing banks are
developing new financial instruments and seeking local partners to meet the challenges of
financial inclusion. There is now a trade body, the Community Development Finance
Association with government and private sector support, developing standards and
effective practices in this relatively new market.

Types of Community Finance Initiatives/interventions used elsewhere to address
these kinds of need

         Basic Bank Account: bank account without a cheque book

         Savings and Loan Scheme (also known as a Loan Guarantee Fund): is usually a
          partnership between a building society and Housing Association whereby the HA
          place money on deposit with a building society so that HA tenants can save into
          this account and benefit from higher interest rates.

         Credit Union: a co-operative savings and loans institution where members with a
          common bond save in the form of shares, which are then re-lent to members. By
          law it is required to lend only to individuals; it can not lend to limited companies
          and other corporate forms.

         Peer Lending (also termed 'micro-finance lending'):This operates by bringing a
          group of people together to form a lending circle, who then individually make
          applications for loans.

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         Soft loan fund: A fund that provides loans to small businesses at an interest rate
          below market levels usually at or around base rate and usually operating with the
          original fixed amount of cash.

         Equity fund (or 'Venture Capital'): investment in businesses whose
          performance over time is expected to produce a higher return for the stakeholder.

         Enterprise Community Development Finance Institution (CDFI) (national):
          provides charitable start up funds for people in specified demographic / thematic
          categories, mainly for small business.

         Enterprise Community Development Finance Institution (local): locally
          controlled; seeks to obtain public and private funding to help businesses that
          experience difficulty in accessing financial services, particularly loans.

         Community reinvestment trust: an independent organisation that provides
          loans at or around market rate to private individuals, small and community-based
          businesses in a clearly defined geographical area.

         Community asset reinvestment trust: a new form of CRT model for rural areas;
          it holds and makes best use of community assets such as village halls and sub
          post offices to provide new funding in such areas.

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APPENDIX 3:                   Summary Table of „Supply‟ Initiatives in the Bristol Area
[Note: See CFS document ”Report on the first stage in the possible creation of a sub-regional
project for a locally based CDFI for the West of England Strategic Partnership area” pp 20–41,
which can be found on].
  Agencies               Current Services              Gaps in Services         What is required to
   involved                                                                       fill these gaps?
Personal Finance and Credit Agencies
Credit Unions         5 existing Bristol CUs have about     Until merge many areas are        Greater support for
(Bristol has 2        1500 members (Bath CU has             without access to a credit        volunteers; funding for
Employment; 3         100 members); SRB /NRF funds          union; money management           full-time staff & other
Live & Work; 2        some staffing; offer affordable       advice; slow development as       support; funding to
proposed; 1 in        alternative sources of credit;        uneven staffing                   provide associated
Bath; others          developing as local entities but                                        money management
developing)           possibility of Bristol CUs merging                                      advice; greater
                      in 2008 (currently do joint                                             involvement of Bristol
                      marketing)                                                              City Council CU .
Woodspring            Provide „paper‟ deposits to           Debt management courses;
Deposit               facilitate rentals (particularly)     rent guarantee schemes ;
Guarantee             those with no bank account,           loans for micro-
Scheme (North         under-25s & homeless); 300            entrepreneurs
Somerset)             tenants currently participate;
                      savings scheme
Personal Finance Advisory agencies
Bristol Debt          Debt advice; training for credit      Training in money                 Greater partnership
Advice Centre         union workers; 2002 client            management to front-line          working between advice
(BDAC)                survey shows benefits.                staff; financial literacy &       services; taking forward
(8 employees)         Casework up 37.6% on previous         preventative work; meeting        pilot projects
                      year.                                 latent demand that can not
                                                            be served at present
Law Centre /          Legal advice regarding social         Few resources (most staff         Improve networking and
Private Practices     welfare issues                        part time within another          co-operation between
/Legal Services                                             centre); difficult to cover all   agencies; provide
Commission &
                                                            specialisms                       greater resources
CAB legal role
CABs, South           Debt advice; advice on income         Limited resource and can          Improve networking and
Bristol Advice        maximisation/benefits                 not meet demand; difficult to     co-ordination/co-
Centre, North         (CAB aim to be one-stop-shop;         cover all specialisms             operation between
Bristol Advice        also promote financial literacy;                                        agencies; facilitate
Centre, BCC           working with Basic Skills Agency      (Case for greater                 access to specialist
Welfare Rights        & proactive in local schools)         intervention made)                advice; provide greater
Unit                                                                                          resources
Significant Sources of Enterprise Advice and Credit
Bristol Means         Co-ordination of agencies to          Generally micro-                  Need to build links
Business              develop coherent approach to          entrepreneur issues are only      between finance
                      increasing and improving levels       partially addressed in Bristol    providers and support
(partners: Avon       of enterprise support to deprived     area; Business Link West          agencies and across to
CDA, BRAVE,           communities in Bristol; some          hope to take forward a social     personal finance
BACEN, BCC,           partners provide business skill       inclusion strategy; some          advisors; efforts to
                      training/other support to micro-      agencies don't meet the           achieve greater
Business Link
West, CEED, CSV       entrepreneurs and those starting      needs of those who are            acceptance of loan risks
Avon Training,        in self-employment                    unable to develop a               in the sector.
East Bristol                                                business plan; need to link
Enterprise, Filton    Loan agencies have low take up        with personal financial
Econet, Knowle        of loan funding available (see        exclusion, which affects
West Dev. Trust,      below).                               enterprise development
WPSD, Learning
and Skills Council,
Business Match)
Bristol               Funded by Phoenix Fund and            Considered to have complex        Need to review
Economic              now serve sub-region and can          application process; not
Development           offer mentoring support. Loans to     sustainable without more
fund (BEDF)           new & existing small businesses       lending.
                      and social enterprise unable to
                      access mainstream finding;
Avon & Bristol        A partnership between unitary         Having difficulty writing         Need to review
Co-operative          authorities; offers loan finance to   sufficient business to cover
Finance (ABCF)        social economy                        costs.

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Appendix 4 Progress made to date


1. Bristol C.C. has recently attracted money from the DTI Phoenix fund to support
   bringing forward 2 actions:

     i)       The formal establishment of a sub regional initiative to incrementally
              grow existing business and social enterprise loan funds.
     ii)      The establishment within this sub-regional initiative of a pilot local area
              project (one stop shop) in the Barton Hill neighbourhood, followed as
              soon as practicable by other local initiatives to meet localised needs.

2. The following associated activities are taking place:

   Credit Unions have committed to working to working together towards a city-
    wide common bond in 2007, and are working towards ensuring quality and
    equality of service delivery across the existing community – based credit unions
    as a step towards achieving this goal. The research will also inform their future
    support through SRB „Bringing Bristol Together‟ funding.

   Avon and Bristol Co-operative Finance and the Bristol Enterprise Development
    Programme have entered into preliminary discussions towards joint working,
    governance or even merger. This is the subject of a separate section to this
    report below.

   Community at Heart, the New Deal programme in Barton Hill has opened up a
    new advice service and discussions are taking place about piloting a new
    „Halal‟ Credit union.

   Work supported by the Personal Finance Education Group, the Department for
    Education and Science, the National Institute for Adult and Continuing
    Education, and the clearing banks, is having an impact on the core school
    curriculum (citizenship) being piloted in schools.

   Advice and community education services are developing packages to support
    adult financial literacy, and improve the range and coverage of financial advice

   Two major clearing banks have re-stated their interest in the continuing
    development of a CDFI and associated activities, and will continue to support
    the project. They will be party to the discussions with the RDA

   Further development work within the Social Economy Bristol Development
    Project has been undertaken on loans for social enterprises: including the
    recent publication of a „Guide to Loans for Social Enterprises‟ with support from
    the other Unitary Authorities. This is being backed up by increased training and
    support for applicants and after-care, being delivered by partner organisations,
    and the new Social Economy Business Development Fund.

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   This work is contributing to policy development at the national level including
    the Community Development Finance Association and a recent Bank of
    England Report on „The Financing of Social Enterprises‟.

3. Work continues to involve all relevant teams within Bristol C.C. including
   Community Regeneration, Trading Standards, Housing and Social Services.

4. An Action plan will be drawn up to outline the incremental growth of a CDFI and
    provide a framework for the activities outlined above. It will identify resources
    required and a work programme for the initiative.

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