CDFI industry is impressive, and it is encouraging similar efforts in the U.K., India, Eastern Europe, and elsewhere-efforts that will benefit from the lessons we have learned. Though still small by capital market scale, more than 550 CDFIs manage more than $6.5 billion in assets today-a lot of money in the nation’s economically disadvantaged markets. That financing created or retained more than 137,000 jobs and 121,000 affordable housing units. They did this with a 1.8 percent cumulative loss rate, consistently low delinquencies, and no losses of investor principle.
A recent sampling of CDFI performance 2 found that 81 CDFIs managing $1.8 billion in assets had provided more than $2.9 billion in financing. In the time since, CDFIs have succeeded by all obvious measures. Although no one thought much about it at the time, CDFIs were an experimental approach to community building and anti-poverty efforts organized primarily around two questions: Could communities without access to conventional finance organize their own financial resources? And, if they did, what difference would it make? Community development financial institutions (CDFIs) as we know them took root approximately 25 years ago in the fertile soil of bank redlining, the Community Reinvestment Act (CRA), and the federal government’s shift away from its short-lived Great Society strategy.
