OFN Member CDFI Loan Funds that completed the FY 2017 Annual Member Survey (thank you!) received their FY 2017 Peer Comparison reports on Monday 11/19. Peer Comparisons use annual survey data to evaluate each CDFI’s key figures related to performance, financial composition, and staffing relative to peer CDFIs with the same primary lending sector and capital size range. OFN Members typically use Peer Comparisons for strategic planning, internal review, performance objectives, and to inform and educate their boards of directors, funders, and investors about their CDFI’s relative performance.
The most salient data point from the FY 2017 annual survey is the favorable trend in net charge-off ratios. Among all loan funds, the average net charge-off ratio decreased from 1.2% in FY 2016 to 0.86% in FY 2017. Except for CDFIs primarily lending in the business and consumer sectors, lending sectors showed substantial decreases in net charge-off ratios and several peer groups exhibited negative average net charge-off ratios. Apparently 2017 was a strong year for recoveries in many CDFI lending sectors. More analysis to come in 2019!
If your CDFI wants a custom Peer Comparison please contact me at email@example.com. For example, if 52% of your CDFI’s outstanding portfolio is in business lending and 48% in housing to organizations lending, and you have total capital of $49 million, it might be helpful to see how you compare to the B5 and Ho4 peer groups, in addition to your assigned B4 peer group. That way you can compare figures to the next largest business sector group (B5) as well as another sector’s group that fits your total capital range (Ho4).
Keep an eye out for OFN’s 20th edition of the 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. Our estimated release date is in early December.