Community Development Financial Institutions (CDFIs) play a critical role by bringing investment and resources to historically underserved communities through capital and other supports to help entrepreneurs start and grow businesses, develop affordable housing, establish community facilities, and build wealth and expand economic opportunity.
The pandemic further underscored the important role CDFIs play in supporting local communities, including providing access to capital for small businesses left out of traditional financial markets, many of which are owned by women and people of color. In fact businesses owned by people of color have been the hardest hit by COVID-19. Historically, these businesses have less access to credit, and less ability to withstand the loss of income. They are not only providers of critical services in underserved communities; they also serve as primary sources of jobs and income in communities of color. Yet, while many advocates rightly called on the federal government to include specific funding for CDFIs in its second pandemic response package, others are asking how well existing CDFIs are really serving communities of color.
On October 7, 2020, AFN and NCG hosted a session which explored key questions such as:
- Where are the gaps in products and services for entrepreneurs of color?
- How are CDFIs of color filing this need?
- What more can be done to support CDFIs lead by people of color?
- What are the opportunities for funders to support innovative approaches to support greater access to products and services small business owners of color?