Community development financial institutions (CDFIs) provide financial services to people and businesses in underserved communities. The Federal Reserve Banks of Atlanta, Minneapolis, St. Louis, and Richmond recently collaborated on research about CDFI partnership formation, development, and sustainability. That effort resulted in the publication of Strength in Numbers: The Growth and Evolution of CDFI Partnerships. It provides timely case studies on eight CDFI partnerships:
- Access to Capital for Entrepreneurs and Carver State Bank
- Atlanta Neighborhood Development Partnership and the Reinvestment Fund
- St. Louis CDFI Coalition
- Native CDFI Network
- Detroit CDFI Coalition
- Maryland CDFI Roundtable
- South Carolina Community Capital Alliance
- West Virginia Loan Fund Collaborative
The case studies yielded information about critical challenges for CDFI partnerships to navigate, including a lack of trust or inability to build trust, constrained capacity and resources, and difficulty sustaining engagement and activity. Three key themes emerged: be realistic about how membership composition affects partnership goals, adopt an operating structure based on the needs of the member CDFIs, and proactively seek a role in shaping local, state, and federal policy.
The Federal Reserve Bank of Richmond has researched developments in the CDFI industry on a regular basis since the 2009 inaugural launch of the biennial Survey of CDFIs in the Southeast. A related Connecting Communities webinar on CDFI partnerships will occur on November 29. Register for the session, which takes place at 3:00 p.m. ET. Participation is free, but preregistration is required.