About 15,000 small businesses in Britain’s poorest areas look set to benefit from £1 billion of lending from community-based finance firms.

The lending is being unlocked by a £150 million, two-year scheme launched by the British Business Bank (BBB), the government’s economic development agency. It is expected to help community development finance institutions (CDFIs) take their lending to small firms that are turned down by high street banks from £102 million a year to £500 million a year by 2029.

Responsible Finance, which represents 50 CDFIs across the UK, said it anticipated that as loans are repaid the additional cash could be recycled, taking the total additional finance that is unlocked to about £1 billion over the next five years.

“It’s a huge step forward,”