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Community Development Financial InstitutionsAs mainstream lenders have increasingly consolidated, grown in size, and streamlined their operations, their connections to local communities have diminished. Twelve million households in the United States today either have no relationship with mainstream lenders or depend on fringe financial institutions, and one fourth of low-income families have no bank at all. This exacerbates longstanding difficulties that these families, and the nonprofit institutions that serve them, have had in accessing credit and financial services. CDFIs help bridge this gap by bringing capital and financial services to underserved people and communities, affording them access to capital to start and expand businesses, build and purchase homes, and develop necessary community facilities. The customer base of the CDFI varies significantly from that of most mainstream financial institutions:
CDFIs function as mission-driven organizations similar to nonprofits but employ market-based approaches more typically associated with the for-profit private sector. There are 800 to 1,000 CDFIs operating in all 50 states and the District of Columbia today. In 2001, the 512 CDFIs represented in a study by the Coalition of CDFIs:
Contact: Dionne Roberts
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