How is Fair4All Finance attracting co-investment from mainstream financial institutions into CDFIs?
Fair4All Finance has directly brokered co-investment from mainstream lenders into the community finance sector — most concretely through a deal with Shawbrooke, in which Shawbrooke committed £7.5 million and Fair4All Finance contributed £5 million, creating a combined £12.5 million partnership with a community development finance institution. Kate Pender points to this deal as proof that mainstream and community finance can work together, and calls on others to replicate and scale the model.
For a longer-term blueprint, Pender looks at what the British Business Bank, JP Morgan, and other institutions have already done in enterprise lending CDFIs — bringing in significant capital and credibility to a sector that had previously been seen as too niche or too small for institutional partners. She is explicit that this model should now be extended to personal lending CDFIs, where the financing gap is equally acute but mainstream engagement has so far been far more limited.
One of the core structural obstacles she identifies is the minimum deal size required by larger organisations. For a major financial institution, the internal cost and effort of executing a transaction only makes sense above a certain threshold — and many CDFI financing needs sit below that threshold. Telling the story of how deals like the Shawbrooke partnership come together, and what customer impact they unlock, is something Pender frames as an active part of Fair4All Finance's work: making the case that these transactions are worth structuring, even when they require creative effort. You can hear her make the argument in full on The Responsible Finance Podcast on Listenly.
"You shouldn't need blood pressure medication to be attempting innovation in financial services."
— Kate Pender, Chief Executive, Fair4All FinanceAbout Kate Pender
Kate Pender's connection to Fair4All Finance goes back to its very beginning in 2019. She joined initially on a part-time secondment to lead the pilot scale-up programme — the operational work of making first investments into community development finance institutions and credit unions. When the COVID-19 pandemic hit, she took on the first phase of Fair4All's COVID grant programme, providing emergency capital to the community finance sector at a moment of acute need. From there, she moved into a permanent role and ultimately applied for the Chief Executive position, giving her arguably the deepest institutional knowledge of any leader in the organisation.
Before Fair4All Finance, Pender spent a long career in economic development, designing and running programmes to help SMEs and small businesses grow faster. That background in practical programme delivery — rather than pure investment or policy — shapes her approach to co-investment: she is focused on making deals actually happen, on telling the stories that bring mainstream partners to the table, and on removing the structural barriers that prevent capital from reaching the communities that need it most.
See also
Fair4All Finance funded Lightning Reach to build a database of grants across the UK, which ultimately mapped more than 3,000 grants — far exceeding an initial expectation of around 1,500 — to connect customers who cannot access loans with alternative financial support.
In the United States, four regulators jointly wrote a prescription clarifying what was acceptable in lending of less than one thousand dollars, which has led to hundreds of millions of dollars being lent by six of the eight largest US banks — a model Kate Pender believes could inform UK policy on affordable credit.
Research published by LEK showed roughly £2 billion of unmet lending demand that could be commercially viable, compliant lending in the UK. Kate Pender explains that CDFIs face structural cost barriers that prevent the sector from meeting this demand without mainstream financial support.