The Communities at Work Fund announced recently that it has approved financing for and is in the process of distributing $60 million through community development financial institutions in hopes of fueling small business loans in economically disadvantaged communities throughout the United States.
The fund was launched in May 2010, with funding from the megabank Citigroup Inc., the Calvert Foundation and the Opportunity Finance Network. It provides financing to community development financial institutions (CDFIs) scattered throughout 39 states and the District of Columbia, which, in turn, lend money to nonprofit and for-profit organizations in otherwise financially underserved low-income communities.
"Less than six months after establishing the Communities at Work Fund, millions of dollars are in the hands of local lenders and small businesses," Bob Annibale, Global Director of Community Development Projects at Citi, said in a statement.
"The money that has been deployed will produce vital jobs in the economic recovery in these communities," said Lisa Hall, Interim President and CEO at the Calvert Foundation.
Organizations receiving monies through the Fund thus far have included Accion Texas, the New Mexico Community Loan Fund, Enterprise Cascadia, Self-Help Ventures and the IFF (formerly the Illinois Facilities Fund).
"Funding for CDFIs and community development projects is hard to come by these days," said Bob Schall, President of Self-Help Ventures, a nonprofit that serves those left behind by the financial mainstream. CDFIs have been around for about 30 years. In 2008, the most recent year for which data is available, they provided $1.6 billion in financing, with lower net chargeoffs than FDIC-insured financial institutions.
One example of projects supported through the Communities at Work Fund financing: a company in Chicago's East Garfield Park (a low-income, largely neglected neighborhood) received funding from the IFF to develop a restaurant, catering and job training facility.
It's expected to create 12 new jobs and serve low-cost meals to about 3,500 local low-income families.
Patti Murphy is Senior Editor of The Green Sheet and President of The Takoma Group. E-mail her at email@example.com.
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