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Towards a Performance Measurement Framework for Community Development Finance Institutions in the UK

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Abstract

Community Development Finance Institutions (CDFIs) are publicly funded organisations that provide small loans to people in financially underserved areas of the UK. Policy makers have repeatedly sought to understand and measure the performance of CDFIs to ensure the efficient use of public funds, but have struggled to identify an appropriate way of doing so. In this article, we empirically derive a framework that measures the performance of CDFIs through an analysis of their stakeholder relationships. Based on qualitative data from 20 English CDFIs, we develop a typology of CDFIs according to three dimensions: organisational structure, type of lending and type of market served. Following on from this, we derive several propositions that consider how these dimensions relate to the financial and social performance of CDFIs, and provide the basis for a performance measurement framework.

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Acknowledgements

The authors thank two anonymous referees, as well as Alexander Kritikos and Belinda Bell for very helpful comments. The corresponding author gratefully acknowledges the financial support of the EQUAL-framework ‹EXZEPT’ which is financed by the European Social Fund (ESF) and the German Ministry of Labour and Social Affairs.

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Authors and Affiliations

  1. CGAP/The World Bank, Washington, DC, U.S.A.

    Christoph Kneiding

  2. University of Cambridge, Cambridge, U.K.

    Paul Tracey

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  1. Christoph Kneiding
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  2. Paul Tracey
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Correspondence to Christoph Kneiding.

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Kneiding, C., Tracey, P. Towards a Performance Measurement Framework for Community Development Finance Institutions in the UK. J Bus Ethics 86, 327–345 (2009). https://doi.org/10.1007/s10551-008-9850-9

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  • DOI: https://doi.org/10.1007/s10551-008-9850-9

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