ImpactAlpha, August 11 — More than 50% of white U.S. households have a FICO credit score above 700, compared with only 21% of Black households. This makes it difficult for Black Americans to secure low-interest debt, or debt even at all.
Los Altos, Calif.-based Packard Foundation backed a half-dozen community development financial institutions, or CDFIs, and other organizations to address discriminatory lending practices and unlock credit for underserved communities of color.
Since last September, Packard has backed Accion Opportunity Fund, with $5 million to lend to California small businesses led by people of color; the Black Vision Fund, with $5 million for Black-led CDFIs providing loans for businesses in Black communities in the South and Midwest; Blackstar Stability, with $3 million in equity for a mortgage debt fund for families of color; Oweesta, with a $5 million loan to support small businesses and housing in Native communities; Rio Grande Valley Multibank, with a $2 million loan; and the SOAR Fund, with a $5 million loan to lend to small businesses and communities-based nonprofits in the southern U.S.
“Addressing deeply rooted racial disparities is a new focus for our mission investments,” writes Packard’s Susan Phinney Silver. The foundation, she said, is aiming to “introduce these organizations’ work to impact investors looking to deepen their own racial equity investing.”