CDFIs (community development financial institutions) are private financial institutions that provide fair, transparent financing and financial education to people and communities underserved by mainstream financial institutions. Community development loan funds, banks, venture capital funds, and credit unions offer financing and financial education that helps people realize their full potential and contribute to thriving communities.
More than 1,200 CDFIs are at work in all 50 states.
Finance Justice & Lend Where It Counts
There are gaps across America — gaps in employment, housing, education, health care, access to banking services — where mainstream finance doesn’t reach or cannot lend. CDFIs fill these gaps and address long-standing issues of disinvestment, the racial wealth gap, and persistent poverty nationwide. Our borrowers are 84 percent low-income, 60 percent people of color, 50 percent women, and 28 percent rural.
Every CDFI investment makes a difference for the people and places CDFIs serve. CDFIs reach deep and lend where it counts.
CDFIs began doing the work of providing responsible, affordable finance where it is needed most in 1973. We’ve grown from early lenders that were primarily funded by individuals and faith-based investment to a more than $222 billion industry that continues to grow to meet the need.
During the Great Recession from 2008 to 2015 CDFIs joined other mission lenders to fill the void left when mainstream finance pulled back. Our consistently low loan loss rates demonstrate that our approach is effective and successful in the markets we serve, both for investors and borrowers, no matter what economic conditions are at work.
Front and Center
CDFIs are catalysts for finance in hard-to-serve markets. We leverage different sources of capital and make it easier for philanthropists, impact investors, and diverse federal funders to make the biggest impact where it matters most.
CDFIs are place-based, and in every state. CDFIs create healthy partnerships between communities, supporters, and developers to build affordable housing and vital community facilities. CDFIs work with mission-focused community-based partners to support small business development and growth and boost local economies. CDFIs help individuals get on the path to successful borrowing to start or grow a business, buy a home, build savings, and more. Wherever we are found, CDFIs use local knowledge and financing acumen to help individuals and communities thrive.
More to Do
CDFIs are committed to trying to solve today’s pressing issues: persistent poverty in rural and Native communities; obstacles to minority-led small business lending; and access to fair and responsible finance for all people. There is more to do, and we are here to stay and do more as we grow this industry.