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Inclusiv raises $45 million Southern Equity Fund to support credit unions

ImpactAlpha, January 6 – Low-income credit unions deploy capital to households and businesses deemed by many commercial institutions as too “high risk.” Nonprofit Inclusiv, which has supported community development financial institutions, including credit unions, for 45 years, closed its $45 million Southern Equity Fund to invest in member-owned credit unions in underserved areas in the southeast.

“Financial exclusion has been a persistent problem in the South, particularly for communities of color,” said Inclusiv’s Cathie Mahon.

The fund offers “secondary capital” loans that credit unions can use for lending in their communities. Every $1 dollar from the fund can create up to $9 in new deposits and further lending, according to the Kresge Foundation, which in September anchored the fund with a $5 million investment.

Inclusiv did not name other investors.

Low-income community finance

New York-based StoneCastle offers an impact-focused federally insured cash account to boost liquidity for community banks and credit unions in underserved areas. Public banks in North Dakota, and soon California, can lend to and partner with other community finance institutions in underserved areas. JPMorgan Chase’s Entrepreneurs of Color Funds in Detroit, New York, San Francisco and other cities are designed to meet entrepreneurs’ locally-specific financial needs.

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