There are more Community Development Banks in the US than there are in the UK. They were originally set up to help people who live in low-income areas. The goal was to help people who wouldn't normally be able to use traditional banking services. This was done to prevent social exclusion and, hopefully, help the economy grow.
Even though the idea took longer to catch on in the UK, the Royal Bank of Scotland has kept doing what it can to help improve access to credit in low-income areas where not everyone can get even bad credit loans and to support social enterprise projects.
One of the best examples of its success is Aspire Community Enterprise Ltd., which was started in Bristol in 1999.
Its goal was to give homeless people and people who had been homeless jobs and training through the distribution of a fair trade catalogue made by the homeless. Within a year of starting, Aspire had found full-time jobs for 15 homeless people, including ex-offenders and people with a history of drug abuse. It also found housing for those employees who had been sleeping on the streets before they got jobs.
With money from RBS's Community Development Banking division, Aspire now works in 9 UK cities and has helped more than 250 homeless people get off the streets and back to work. The Aspire Group, which is what they are now called, has even bigger plans. They hope to start new businesses like gardening services and furniture restoration, which they hope will give people who have been socially excluded a second chance.
With an increasing number of people falling victim to some kind of bad credit history appearing on their credit files due to one reason or another, there has, over recent years, been an improvement in the number of lenders, especially non-traditional ones, who have realised that there are many people out there who should be offered bad credit loans and the opportunity to repair their financial reputation but who have previously been unable to gain access.
It's great that the RBS is willing to back projects like Aspire and other efforts to help people who are financially and socially excluded. It helps to create new markets and gives important cash to community projects in the area. After its success, let's hope that other major high street banks will also do more to help people who are less fortunate than others borrow money and create a society where everyone feels like they belong.
