OFN recently released the 22nd edition of its Side by Side publication, an annual reference guide for CDFI industry practitioners, investors, and others interested in assessing the opportunity finance industry’s activity and performance.
This year’s edition uses data from OFN's FY 2019 Annual Member Survey and provides information on 268 OFN member CDFIs. Of the 268 CDFIs, 242 are included in the peer analysis, which is split by primary financing sector and asset size. OFN also added an extra peer group for Intermediary CDFIs, bringing the total number of peer groups included to 35.
Key Insights from the FY 2019 Side by Side Report
The publication points to robust performance for OFN member CDFIs in FY 2019. Three key data points from the FY 2019 annual survey are net charge-off ratios, interest rate on borrowed funds, and interest rate charged on outstanding loans receivable.
- Among all OFN members, the average net charge-off ratio decreased from 1.11 percent in FY 2018 to .51 percent in FY 2019
- For OFN loan funds, the average net charge-off ratio increased slightly from 1.22 percent in FY 2018 to 1.25 percent in FY 2019
- Except for CDFIs primarily lending in the Commercial Real Estate and Housing to Individuals sectors, whose net charge-off ratios were relatively unchanged, Microenterprise, Business, and Community Services lending sectors exhibited decreases in net charge-off ratios that were offset by increases in the Housing to Organizations and Consumer sectors.
Additionally, the average interest rate paid on borrowed funds for OFN member loan funds increased from 2.40 percent in FY 2018 to 2.47 percent in FY 2019. The average interest rate on outstanding loans receivable also increased from 6.05 percent to 6.19 percent respectively.
How the Side by Side Report Can Inform Investors, CDFIs, and More
For investors, Side by Side is an excellent resource for understanding relevant aspects of the opportunity finance industry. Including key ratios on financing and operations, the report helps investors evaluate opportunity finance institutions for future investment, in addition to benchmarking current CDFI investees against their peers. With 35 peer groups across eight financing sectors to compare, Side by Side is a uniquely valuable resource.
For CDFIs, including non-OFN members, Side by Side is an important resource for comparing your organization’s activities and performance against peers. Peer group comparisons can inform management and operating decisions related to strategic planning and performance objectives, among other initiatives. For CDFIs in an expansion or reorganization phase, this information can help identify key differences in performance and financial composition among CDFIs operating within various lending sectors and asset sizes. Many organizations use Side by Side to inform and educate their boards of directors, funders, and investors.
Download your complimentary copy of Side by Side on OFN’s Publications page.
For questions about Side by Side or other OFN research publications, please contact Brent Howell, OFN's senior associate of knowledge sharing, at email@example.com or 202.868.6913.