The Federal Reserve System conducted the External Link2021 CDFI Survey this spring to gather information on the role of Community Development Financial Institutions (CDFIs) in stabilizing communities across the country. The effort gathered information from 345 CDFIs about their financial well-being throughout the COVID-19 pandemic, operational gaps and challenges, and effects on clients and communities they serve.
CDFIs provided funding to small businesses and community organizations that otherwise might not have survived the last year. As mission-oriented lenders, CDFIs are at the forefront of serving low- and moderate-income people (LMI) and communities. As part of the ongoing economic recovery, many communities will rely on CDFIs to help stabilize their LMI populations.
Key findings show a strong financial status
A few key findings from the national 2021 CDFI Survey include:
- CDFIs indicated a widespread influx of new customers, strong funding streams throughout the pandemic, and generally positive current financial states.
- Many new clients were directly tied to COVID-19 pandemic funding, including those seeking access to pandemic financial assistance programs, and those seeking technical assistance for loan and grant applications.
- More than three-quarters of respondent CDFIs indicated they were unable to provide all the products or services they would like to offer on a sustained basis. A majority of these CDFIs cited limited staffing and capital constraints.
Jodie Harris, director of the CDFI Fund, recognized the importance of the national survey.
“The Federal Reserve’s CDFI Survey gathers valuable information on CDFI activity and impact in distressed and underserved communities,” she said. “This data is particularly helpful in understanding how CDFIs have been at the forefront of the economic response to the COVID-19 pandemic.”
Survey of Native CDFIs returns similar findings
Pete Upton is executive director of the Native 360 Loan Fund and chairman of the Native CDFI Network (NCN). He and his team work to address the needs of Native American business owners in Nebraska, where the loan fund provides affordable credit, capital, technical assistance and related programs to help build strong and self-sufficient Native American businesses.
The Native CDFI Network conducted a survey of Native CDFI membership in spring 2021 and the results mirrored those of the Federal Reserve's CDFI Survey. Find more information about the Native CDFI Network at External LinkNative CDFI – Uniting the Native Voice
“The successes CDFIs had, especially Native CDFIs, are due to support from numerous organizations such as the CDFI Fund, Native CDFI Network and Opportunity Finance Network,” Upton said. The organizations provide access to key voices, public officials, funders and governmental agencies through webinars and calls that allowed Native CDFIs voices to be heard. “CDFIs and our small business clients came out of the pandemic much stronger than anticipated,” Upton said.
Connect with CDFIs and small business resources
Interested in working with CDFIs? Check out the External LinkCommunity Development Investment Resource Guide for CDFIs in the Federal Reserve Bank of Kansas City’s Tenth District and in your state.