CDFIs are federally insured and regulated depository institutions that provide credit and financial services to people and communities underserved by mainstream commercial banks and lenders. CDFIs encompass a range of nonprofit and for-profit entities including community development banks, community development credit unions, community development loan funds, community development venture capital funds, and microenterprise loan funds. 1066 government certified CDFIs by 2018 with $150B in AUM. CDFIs raise capital from institutions (banks, non-bank financial institutions (i.e., insurance companies), government, religious institutions, foundations, non-financial corporations), and from individuals. Work closely with commercial banks in underwriting loans that are sometimes labor intesive and not a good fit for those banks; Updated numbers from Oct 2020: 1100 revolving loan funds with $220B in AUM; Got $7.5B of PPP which was deployed extremely fast; default rates are very low at 1.5%. There are six different types of CDFIs: (1) community development bank, (2) credit union, (3) loan fund, (4) venture fund, (5) micro enterprise
Glossary
CDFI
Definition
CDFIs are federally insured and regulated depository institutions that provide credit and financial services to people and communities underserved by mainstream commercial banks and lenders.