Sorting the sheep from the wolves in sheep’s clothing: defining Community Development Finance Institutions as distinct from fringe lenders in efforts to address financial exclusion

This chapter concerns one response to the problem of financial exclusion in Australia, namely support for the work of Community Development Finance Institutions (CDFIs). This support has included public funding, and it is therefore important that the criteria for eligibility for funding as a CDFI are well defined. Such clarity of definition, which has to date been lacking, will help to ensure that public expenditure is appropriately targeted to achieve the best outcomes in terms of addressing financial exclusion. A report measuring the extent of financial exclusion in Australia defines financial exclusion as follows: ‘Financial exclusion exists where individuals lack access to appropriate and affordable financial services and products; the key services and products are a transaction account, general insurance and a moderate amount of credit.’2