Community development financial institutions, groups that lend to people mainstream banks reject, invested $3.5 billion in underserved communities across the U.S. in 2004, a new study says.
The CDFI Data Project, an initiative of several major community development groups, published a new report called “Providing Capital, Building Communities, Creating Impact,” based on data from more than 500 CDFIs.
Together, the groups surveyed have $12.2 billion in financing outstanding, and have written off 0.55 percent of their loans over the past five years, compared to 0.56 percent for mainstream banks, the study says.
Community development investment in 2004 provided support to 6,887 business that in turn either created or retained more than 28,300 jobs, the study says.
That investment also spurred the construction or rehabilitation of more than 43,000 units of affordable housing, the study says, as well as the creation or renovation of 470 community facilities in economically-challenged communities.
Loans from these groups provided 20,653 people with alternatives to high-interest payday loans and helped 122,755 low-income people open bank accounts.
Overall, more than half of CDFI customers are women, almost six in 10 are minorities, and seven in 10 are low-income, all of which are higher percentages that reported by mainstream banks, the study says.
The CDFI Data Project is supported by the Fannie Mae, Ford and John D. and Catherine T. MacArthur foundations.