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Press release, Thursday 9 October 2008
The Chief Executive of the Community Development Finance Association (cdfa) has called on banking industry leaders to follow the example of non-profit community lenders as they restructure the financial services sector.
Around the country, community development finance institutions (CDFIs) are providing business and personal loans to people who have been turned away by the high street banks. They are driven by the needs of their customers, rather than shareholders – and only lend amounts that customers can afford to repay.
Bernie Morgan, cdfa Chief Executive, says that CDFIs are providing an “alternative financial services sector” that is ethical, fair and responsible – and that the banks should learn from it.
Commenting on the current banking crisis, Ms Morgan said: “Recent events have not only exposed the fragility of the mainstream banking sector, but should also point the way to a more ethical alternative.
“While the mainstream banking sector has been based on shareholder return – and, frankly, greed – CDFIs are motivated by a desire to help the community. And although we deal with the customers considered too risky by the high street banks, we only lend what they can afford to repay.
“CDFIs provide a graphic example that big is not necessarily better or sustainable. The question is: will the banking industry learn from this?
“We need to build a new financial services industry which is based on the principles of community development finance. Only then will we be able to tell our grandchildren that we learnt from experience and did the right thing.”
For press enquiries contact Joe Dumont, 020 7430 0222 ext 207