ImpactAlpha, April 14 — Community development financial institutions and minority depository institutions played a crucial role in channeling COVID-relief funding to small businesses in low-income, rural and communities of color, where big banks and traditional lenders have little presence.
This week, the U.S. Treasury came through with more than $1.7 billion in grants to more than 600 CDFIs via the Equitable Recovery Program, the largest grant program to date of the Treasury’s CDFI Fund.
Build back better
The CDFI Fund’s Jodie Harris said the grants will “increase availability of financing and capital for small businesses, promote affordable housing, and improve accessibility to loans that help families make ends meet — all of which were compromised by the pandemic.”
Among the recipients are Anchorage, Alaska-based Cook Inlet Lending Center, which pivoted from home-mortgage lending to small-business lending during the pandemic, and Little Rock-based Southern Bancorp, which processed federal Covid-relief loans as small as $2,000.
Last year, 162 CDFIs and MDIs, mainly from Mississippi, Louisiana, North Carolina, California and Texas, received nearly $8.3 billion under the Emergency Capital Investment Program to boost small-business lending.
“Small businesses in historically underinvested communities continue to face significant challenges accessing adequate capital,” the U.S. Impact Investing Alliance wrote, calling on government “to prioritize consistent levels of funding and bold policy solutions to support the CDFI and MDI industry and the communities they serve.”