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What capacity building support did NatWest provide to CDFIs alongside the Hardship Grant funding?
Half of NatWest's Hardship Grant funding was not distributed to consumers — it was directed at helping CDFIs strengthen their own operations. The six CDFIs each identified their own priorities, and three clear themes emerged: improving customer outcomes and increasing lending volumes, streamlining customer journeys, and supporting CDFIs to scale. This dual structure — direct consumer grants combined with institutional capacity funding — was deliberately designed to build resilience in CDFI business models under pressure from surging demand.
Six CDFIs, Three Priorities — Each Institution Set Its Own Agenda
The capacity building component was not a top-down prescription from NatWest. Each of the six participating CDFIs identified their own priorities within a shared framework. This bottom-up design was essential: it respected the diversity of CDFI business models and the communities they serve, while channelling funding toward the areas where it would have the most durable impact.
Three themes emerged organically across the six institutions. The first was improving good customer outcomes and increasing lending volumes — a recognition that CDFIs needed both better processes and greater reach. The second was keeping customers engaged and streamlining customer journeys, addressing the operational friction that can deter financially vulnerable people from completing applications. The third was helping CDFIs to scale, acknowledging that the cost of living crisis had created a step-change in demand that smaller institutions were not structurally equipped to absorb.
This approach is explored in depth in the episode featuring Brian Holland and Stuart Foster, where they explain how NatWest structured the overall £900,000 allocation to Responsible Finance to serve both immediate consumer need and longer-term sector resilience.
A Stressed Business Model — and a Deliberate Strategy to Protect It
The cost of living crisis did not just increase consumer demand for affordable credit — it put direct pressure on CDFI business models. CDFIs operate on thin margins, and a significant spike in applications strains both their capital and their operational capacity simultaneously. NatWest's decision to split its grant funding between consumer-facing and institution-facing support reflected a clear-eyed understanding of this dynamic.
Stuart Foster, who has worked with NatWest for 24 years and has served on the Better Society Capital board for 6.5 years, brings deep institutional knowledge of how the CDFI ecosystem functions under stress. The capacity building component of the grant was designed to ensure that the six CDFIs could not only meet immediate demand, but emerge from the crisis period structurally stronger.
For a fuller picture of how this grant fit within NatWest's broader cost of living response — which included waiving around £70 million in fees and interest charges for customers directed to its financial health support area — listen to The Responsible Finance Podcast directly.
"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, NatWest Group.
Brian Holland has been with NatWest for 14 years. He leads the bank's group-wide approach to vulnerable customers, encompassing consumer duty, the retail bank's risk and control environment, and remediation activities. He co-authored the joint foreword to Responsible Finance's 2023 impact report alongside Stuart Foster, published in May 2024 at an event hosted by NatWest. His work sits at the intersection of financial inclusion and regulatory compliance — making him one of the most directly relevant voices on how a major UK bank thinks about its responsibilities to underserved customers. This episode, available in full on The Responsible Finance Podcast, is one of the few publicly available records of how NatWest structured its CDFI support internally.
See also
What were the key outcomes and demographics of the NatWest Hardship Grant Programme delivered through Responsible Finance and CDFIs in 2023?
A total of £416,000 was dispersed by six CDFIs, with an average grant size of £102, helping around 4,000 families. Demographic data showed that 62% of recipients were women, and 66% were aged 25–44.
Why did NatWest choose to partner with CDFIs as part of its cost of living support package in 2022–2023?
NatWest used its data from banking 90 million customers across the UK to anticipate the impact of rising interest rates and inflation on consumers, identifying CDFIs as the right partners to reach those excluded from mainstream financial support.
How long has NatWest Group been working with Community Development Finance Institutions (CDFIs) and what does that history involve?
NatWest has been active in the community finance sector since the mid-1990s — over 30 years of involvement. The bank was a founding funder and long-term institutional partner to CDFIs across the UK.
Key takeaways
- Half of NatWest's Hardship Grant allocation — part of a £900,000 package to Responsible Finance — went directly to building CDFI institutional capacity, not consumer grants.
- Each of the six CDFIs set its own capacity building priorities, producing three common themes: lending outcomes, customer journey improvement, and scaling.
- The dual structure was an explicit response to CDFI business models being stressed by a surge in demand during the cost of living crisis.
- This approach reflects a deliberate long-term investment logic: stronger CDFIs can serve more people sustainably, well beyond any single grant cycle.
Hear Brian Holland and Stuart Foster explain NatWest's full approach to CDFI support.
The complete episode is available on Listenly.