With increasing wealth has come greater inequality. In 2005/2006, 13 million people in Great Britain lived in households that were below the low-income threshold; roughly one-fifth of the population. Poverty becomes concentrated in specific areas and neighbourhoods, where disadvantage is intensified by financial deprivation, poor public services, low-quality housing and infrastructure, isolation, unemployment, poor skills, economic inactivity, low income, family breakdown, increased crime and decreased health.

Financial services institutions often withdraw from these low-income communities, and low financial literacy, language barriers, poor credit history and lack of collateral further contribute to limit access to finance. Without a bank account, individuals suffer further financial penalty in terms of higher cost credit, more expensive bill payment, and lack of insurance.

Restricted access to opportunity and financial services creates disengagement, apathy and cynicism, and eventually to social exclusion in a negative spiral of decline. Enterprise and entrepreneurial activity are stifled.

Alternative sources of finance, including micro grants and loans, can significantly combat the failure of the market to meet the needs of disadvantaged communities. Micro-enterprises provide income for some of the poorest families in the UK, and these small enterprises in deprived communities are most likely to have financing needs that can be best met through community finance organizations, micro grants and micro loans. They provide the critical first step on the ladder out of deprivation and into the formal economy, especially when coupled with intensive coaching and training support.