Answer extracted from The Responsible Finance Podcast — listen to the full episode below.
Is NatWest ready to invest in and lend directly to CDFIs?
NatWest is unequivocally open for business with CDFIs and has demonstrated this commitment over more than 30 years. The bank remains ready to provide direct investment and lending to help CDFIs scale safely while securing the liquidity they need to support their customers sustainably, though commercial sensitivities prevent full disclosure of specific mechanisms.
Three decades of proven partnership
NatWest's relationship with Community Development Finance Institutions extends back to the mid-1990s, making it one of the UK banking sector's longest continuous engagements with the CDFI ecosystem. This is not a recent pivot or marketing exercise—it reflects institutional commitment embedded across multiple business lines and decades of strategic decisions.
The bank's involvement ranges from direct funding to capacity building. In the period between 2008 and 2012, NatWest provided over £1 million in funding and technical assistance to what was then the Community Development Finance Association, now Responsible Finance. More recently, as detailed in The Responsible Finance Podcast, NatWest allocated £900,000 to the Hardship Grant Programme in 2023, supporting six CDFIs in distributing £416,000 in grants to approximately 4,000 families.
A unique marker of NatWest's institutional commitment is NatWest Social and Community Capital (S&CC), established in 1999—the only bank-owned CDFI vehicle of its kind in the UK. This entity exists specifically to serve customers excluded from mainstream banking, demonstrating that the bank's CDFI work is not confined to referrals or lending partnerships alone.
The scaling imperative and liquidity focus
Holland's commitment goes beyond historical precedent. He explicitly framed NatWest's goal as helping CDFIs scale safely while ensuring they have the right liquidity to support their customers and grow as businesses. This signals that investment and lending decisions are not ad hoc but follow a disciplined, growth-oriented framework.
The emphasis on liquidity is particularly significant. CDFIs often face cash flow challenges when lending to underserved populations with irregular income patterns or credit histories. Access to patient capital or lines of credit from a mainstream bank like NatWest directly addresses one of the sector's structural constraints, a point Holland reinforced by discussing NatWest's broader cost of living support, which included waiving approximately £70 million in fees and interest charges to vulnerable customers.
As documented in this episode of The Responsible Finance Podcast, NatWest's willingness to work with Responsible Finance and other sector members reflects recognition that individual CDFIs benefit from sustained institutional partnerships, not one-off grants.
"CDFIs provide a terrific part of the overall ecosystem of financial services — for those who are not able to borrow from the mainstream banks, CDFIs do a brilliant job filling that gap."
Brian Holland — Director, Customer Vulnerability, Retail Controls and Remediation at NatWest Group. Holland has led NatWest's vulnerable customer strategy for 14 years, overseeing consumer duty compliance, retail bank risk and control frameworks, and customer remediation activities. He co-authored the joint foreword to Responsible Finance's 2023 impact report, published in May 2024.
Holland's language—"fill that gap"—underscores that NatWest views CDFI lending not as competition but as a complementary ecosystem function. When mainstream banks decline a loan application, a CDFI steps in with underwriting expertise, relationship banking, and financial capability support that high-street institutions no longer provide. Holland's role managing vulnerability and remediation positions him uniquely to understand why this ecosystem matters to NatWest's broader mandate.
For further context on how NatWest's investment thesis translates to sector-wide opportunity, the podcast explores policy tools that could unlock private capital into CDFIs, including the Dormant Assets Fund model that NatWest itself has successfully deployed.
Commercial sensitivities and forward commitment
Holland did not disclose specific investment vehicles, lending rates, or ticket sizes—a reticence rooted in legitimate commercial confidentiality around deal terms and competitive positioning. However, this restraint actually strengthens his credibility. He could have offered vague platitudes; instead, he acknowledged constraints honestly while reaffirming commitment.
The statement that NatWest "will continue to work with Responsible Finance and sector members to find ways to remain involved" is not a hedge—it is a commitment to ongoing dialogue and collaborative problem-solving. CDFIs operate in an evolving regulatory and funding landscape; sustained partnership means NatWest will adapt its support mechanisms as market conditions and policy frameworks change.
Key takeaways
- NatWest has supported CDFIs for over 30 years through direct funding, capacity building, and its own CDFI vehicle (NatWest S&CC), demonstrating institutional rather than transactional commitment.
- The bank's goal is to enable CDFIs to scale safely with adequate liquidity—a focus on sustainable growth, not short-term returns or risk transfer.
- Commercial confidentiality prevents disclosure of specific investment or lending terms, but the commitment to ongoing collaboration with Responsible Finance and sector members remains firm.
- NatWest's vulnerable customer expertise and 24 years of relationship banking across financial institutions position the bank uniquely to understand and support CDFI ecosystem needs.
See also
Why is 2023 being described as a record-breaking year for CDFI lending and why does NatWest consider this significant?
The cost of living crisis drove greater volumes of individuals and businesses to CDFIs, contributing to a record year of lending across the sector. NatWest recognizes this as a critical moment for the CDFI ecosystem to demonstrate its value and sustainability.
What policy tools and funding mechanisms could help scale investment into the CDFI sector according to NatWest?
Stuart Foster highlighted the Dormant Assets Fund as a potential source of catalytic capital that could unlock private capital from mainstream lenders and accelerate CDFI growth.
What is NatWest's 'Know My Credit Score' initiative and how does it relate to the CDFI ecosystem?
Know My Credit Score is a NatWest service that gives customers free access to their credit score and tips on how to improve it; it has been accessed 83 million times over 12 months by NatWest's 17 million customers.