Scottish money

Community finance project improves financial inclusion


A pilot project to establish a Community Development Finance Institution (CDFI) has increased access to affordable credit and financial services among its target market, and improved confidence in managing money, according to an evaluation by the Improvement Service.


Supported by Fife, Falkirk and West Lothian councils, the aims of the CDFI are to offer access to affordable credit to people living in the lowest income households, and to promote take up of wider advice and support services by those in need. It offers a more affordable alternative to higher cost short-term lenders and is targeted at individuals who are unlikely to be able to access mainstream credit options and who may be experiencing financial exclusion.


Initial findings suggest that the CDFI has contributed towards delivery of the following intended outcomes:


  • 50% of CDFI customers, by securing affordable loans, have improved access to financial services and increased awareness and understanding of affordable credit options.
  • 60% of CDFI customers, when referred onto other advice and support services, have increased confidence and ability to manage money on a day to day basis.
  • Falkirk, Fife and West Lothian councils have improved relationships and increased opportunities for partnership working.
  • Falkirk, Fife and West Lothian councils have jointly established a cost-effective approach to promoting financial inclusion and reducing poverty in their constituent areas. CDFI customers are less likely to apply to higher cost ‘for profit’ credit providers after getting a loan from Conduit Scotland.


The Consortium model for developing a CDFI is the first initiative of its kind in Scotland and covers three local authority areas with more than 700,000 residents.


The full evaluation report is now available on the Financial Capability Evidence Hub.