If we really want growth in every postcode, we need to make sure opportunity and finance reaches every postcode too.
Richard Kirtley, Aug 14, 2026
There was some unexpectedly good news about the British economy this week. The latest figures show that the UK economy grew by 0.4% in the second quarter of this year, following growth of 0.6% in the first. June itself was stronger than expected. Depending on which headline you read, Britain is proving “resilient”, growth is holding up, and there are reasons for cautious optimism. At almost exactly the same moment, the Government is talking about delivering “growth in every postcode” - an ambition which is difficult to disagree with. Growth should not belong only to London, or to a handful of already successful sectors, businesses and communities. It should reach into towns, estates and neighbourhoods across the country. But there is a question underneath all of this which we don’t ask nearly enough: who actually gets the opportunity to participate in that growth?
Because an economy can still grow while millions of people remain locked out of it.
We see this every day at Purple Shoots. We meet people with ideas, skills, determination and an extraordinary willingness to work, but very little access to the capital that would allow them to turn those things into an income. Sometimes they need £1,000. Sometimes £3,000. Sometimes £5,000. Enough to buy equipment, secure premises, purchase stock, get insured, build a website or simply create the small amount of working capital that allows a business to begin trading properly. These are not enormous sums of money in the context of the British financial system. But to the person trying to build something from nothing, they can be transformative.
This is where our national conversation about growth has a blind spot.
When policymakers talk about business finance, the numbers very quickly become enormous. Billions for investment. Hundreds of millions in guarantees. Venture capital. Scale-ups. Export finance. Innovation. High-growth businesses. All of those things matter. Britain absolutely should invest in ambitious companies with the potential to grow rapidly. But somewhere underneath that conversation sits an entrepreneur who needs £2,500 to buy the tools that will allow them to become self-employed, and our financial system can be remarkably bad at seeing them.
The Government itself estimates that the gap between SME demand for finance and the amount available could be between £1.6 billion and £4.1 billion every year. The British Business Bank’s work increasingly recognises the importance of underserved businesses and communities, including through its Community ENABLE programme for not-for-profit lenders. These are welcome developments. But the question of where finance reaches is only half the story. We also need to ask how far down the financial ladder it reaches.
There is a world of difference between an established SME seeking £100,000 to expand and somebody on Universal Credit seeking £2,000 to start their first business. Both are entrepreneurs. Both may create economic activity. Both may eventually create employment. But the financial system sees them very differently.
The second entrepreneur is much more likely to have a thin credit file, historic financial difficulties, little security and no meaningful savings. They may have been unemployed. They may be living in one of the most deprived communities in the country. They may have already approached mainstream lenders and discovered that the computer says no before anybody has really looked at the business they are trying to create.
That does not necessarily make them a bad entrepreneur. It makes them a difficult proposition for an automated lending system and those two things are not the same.
This distinction matters enormously if we genuinely want growth in every postcode, because deprived communities are not devoid of enterprise. Quite the opposite. We encounter extraordinary entrepreneurial energy in communities routinely described in terms of their deficits. People repair cars, cut hair, cook food, make clothes, provide childcare, teach, clean, design, build, manufacture, create and solve problems. Often they are already doing bits of this informally. What they lack is not necessarily ambition or ability. What they lack is access.
That is why microfinance matters.
At Purple Shoots, we deliberately work at the part of the market that others struggle to serve. We provide small, affordable business loans to people who have often been excluded from mainstream finance, and we make our decisions by trying to understand the person and the business rather than simply asking an algorithm for a score. It is slower. It is harder and, yes, lending to financially excluded people carries risk. But if financial inclusion is going to mean anything, somebody has to be prepared to do the difficult bit.
The alternative is a peculiar version of economic policy in which we tell people that work and enterprise are routes out of poverty while denying them access to the modest amount of capital they need to pursue them.
The contradiction becomes even sharper when we think about Universal Credit. The system explicitly recognises self-employment as a route into work and provides a 12-month start-up period for some people beginning a business, during which the Minimum Income Floor does not apply. In other words, public policy says: we want you to try this. But the financial system can simultaneously say: we won’t give you the money you need to start.
We can do better than that.
Growth is not simply a number produced by the Office for National Statistics. It is millions of individual economic decisions. Someone taking on their first employee. Someone buying a van. Someone opening a shop. Someone turning a hobby into an income. Someone coming off benefits because the business they started is finally supporting their family. Someone who has spent years being told what they cannot do finally being given the opportunity to show what they can.
This is why the smallest investments can sometimes produce disproportionately large effects. When we lend a few thousand pounds to somebody who would otherwise remain economically excluded, the return is not confined to the interest on that loan. There is a business trading where previously there wasn’t one. There is income being earned. There are goods and services being purchased. There may be benefits no longer being claimed. There may eventually be employment created. Money circulates within the local economy. Confidence grows. Families become more secure. Communities retain businesses and services.
None of that will ever look as exciting on the front page of an investment prospectus as the next billion-pound technology company, but multiply it across thousands of people and hundreds of communities and you begin to describe something that looks remarkably like inclusive growth. That phrase is used frequently. Delivering it is harder.
If we really want growth in every postcode, capital has to reach every postcode too. And not simply £250,000 growth loans for the strongest businesses within those communities. We need £5,000 loans. £2,000 loans. Sometimes £500 loans. We need patient assessment, human judgement and organisations prepared to work with people whose financial lives do not fit neatly into conventional lending models.
There is encouraging movement in this direction. Community finance is increasingly part of the national conversation. The British Business Bank is recognising the role of CDFIs and other mission-led lenders in reaching underserved businesses. But microfinance must not become the forgotten bottom rung of that ladder.
Because without the bottom rung, a ladder isn’t particularly useful to somebody standing on the ground.
The economic figures this week give Britain something to build upon. Growth has been stronger than many expected. But the test of the next few years should not simply be whether we can make that number bigger.
It should be whether more people are able to participate in producing it. Whether someone without savings can still start a business. Whether a poor credit history permanently determines someone’s economic future. Whether entrepreneurship is genuinely open to people from every community. Whether capital can reach the places where relatively small amounts of it can make an enormous difference and whether, when we say growth in every postcode, we really mean it.
There is talent in every postcode. There are ideas in every postcode. There are entrepreneurs in every postcode.
The challenge is making sure opportunity, and the finance that makes opportunity possible, reaches them too.