Blog
Kyle Savage, executive director and founder of Shining Studios Theater, used a new type of CDFI-based loan to take his afterschool theater program outdoors during the summer and fall of 2020, and online over the winter. (Image courtesy of Shining Studios Theater)
"Scaling Community Finance to Fill a Growing Market Gap," In Stanford Social Innovation Review
June 23, 2021
During the pandemic, Community Development Financial Institutions (CDFIs) stepped up to deliver desperately needed relief to hard-to-reach small business owners. While their efforts highlighted their potential to reach those most in need, it also highlighted the challenges that keep them from effectively addressing financial inclusion at scale. I joined Patrick Davis, Community Reinvestment Fund's (CRF) Vice President of Program Strategy and Development, to explain how we can rethink community finance for Stanford Social Innovation Review. You can read our article here.
The COVID-19 crisis is only the tip of the iceberg for America's small businesses; an inequitable financial system lies beneath the surface. CDFIs have proved they can erode structural barriers in the credit market if they have the resources and support. If we want a more equitable economy, then we need to empower and support community lenders to grow and meet the demands of the market, particularly underserved and underbanked small businesses, which are disproportionately led by people of color and women.
We can reimagine community finance to build resilient and inclusive financial systems for decades to come. Last year, a group of investors and CDFI partners–including Calvert Impact Capital and Community Reinvestment Fund–came together to develop a new lending model that connects community-based lenders with centralized resources. Since then, we have put the model into practice with programs like the Southern Opportunity and Resilience Fund, the California Rebuilding Fund, and the New York Forward Loan Fund, and their results have been promising. Read "Scaling Community Finance to Fill a Growing Market Gap" to learn more.
