M-RCBG Associate Working Paper No. 41

Tackling Financial Exclusion through Community Investment: How should the UK strengthen its community investment sector? Lessons from the US experience

Lyell Sakaue & Anna Stansbury



Financial exclusion is a large and growing problem in the UK. The community investment sector – focused on tackling financial exclusion – is effective but small, reaching roughly one sixth of the individuals and organisations requiring access to affordable and appropriate finance. What factors are inhibiting the UK community investment sector’s development? And what measures can be taken to enable community investment to better tackle financial exclusion?

We answer these questions with reference to both the UK and the US community investment markets. The US has developed a large and effective community investment sector over the last four decades – and has frequently served as a reference point for UK community investment policy. Through reviews of academic and practitioner literature, and expert interviews in the US and UK, we have extracted relevant lessons from the US’ successes and shortcomings, identified key constraints to the UK sector’s development, and generated five policy recommendations.

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