Learn How Native CDFIs Make Great Investment Partners
Grow economic opportunity in Native communities through secure investments with long-term impact.
Rooted in the cultural and historical context of Native communities, Native CDFIs weave partners, funding, and networks together to help create lasting prosperity in local communities.
A WIN-WIN INVESTMENT WITH LONG-TERM IMPACT
Native CDFIs are proven and promising partners for financial institutions and other investors to make a positive difference in Indian Country successfully and sustainably. Banks, credit unions, and other financial institutions wanting to make meaningful community investments can turn to Native CDFIs as a safe, secure way to respond to community needs.
They’re engines of change that expand economic opportunity in Native communities, opening doors to loans, credit, jobs, and much more.
“The thing about this model is that it’s sustainable. As entrepreneurs gain business knowledge, and as their businesses grow, they can seek funding from more traditional sources. To me, that is a compelling strategy.”
— Connie Smith, Program Manager, Wells Fargo Diverse Community Capital Program
“I think there is some real room for investors to be able to develop programs where they’re either lending to Native CDFIs, or making private capital investments into CDFIs. . . . If you take into account the huge positive impact on the community you’re helping to bring about, then these are wonderful investments.”
— Jodi Neuman, Investment Manager, Trillium Asset Management
WHY NATIVE CDFIs ARE STRONG, SUCCESSFUL, AND SUSTAINABLE
The key to the success of Native CDFIs lies in their commitment to building strong community relationships. Long-term economic impact is achieved by connecting families and communities with the resources necessary to bring dreams to life for multiple generations. With deep cultural ties and understanding, Native CDFIs are poised to build trust and create a powerful infrastructure for self-sufficient economic and cultural wealth.
ADDING UP THE BENEFITS OF PARTNERING WITH NATIVE CDFIs
#1: Sustainable impact and economic growth
Native CDFIs weave together culturally informed relationships that bridge traditional cash economies with the financial mainstream. They’re anchored in local culture and passionate about creating opportunities for growth. They lay the groundwork for investment in Native communities by providing capital and financial assistance, education, and training.
This leads to a powerful multiplier effect, which helps Native entrepreneurs and Native-led businesses thrive. It also creates jobs, an expanded tax base, and new business development and market opportunities. These opportunities haven’t often been available in Native communities.
#2: New potential customers
In many cases, Native CDFIs are the first encounter Native families and individuals have with a financial institution. Native CDFIs help families reach financial stability through education, credit building, and savings. Because Native CDFIs serve a large unbanked population, staff will frequently refer program participants to a nearby bank or credit union to open their first account and deposit money as part of a savings plan.
Many of these new potential customers are the first in their generation to break a cycle of poverty and move toward building a life of economic prosperity.
#3: Strong net asset ratios, low historical write-off and delinquency rates
Native CDFIs have default rates that are lower than that of the average financial institution  because they’re anchored in the Native communities they serve. They build lasting relationships with lenders and provide extended services, such as financial education and training, in conjunction with their lending activities.
That edge in their business model is a major piece of the Native CDFI success story.
#4: Huge, unmet capital demands in Indian Country
A 2012 Oweesta-sponsored Access to Capital study of certified Native CDFIs revealed that as Native economies grow, Native CDFIs are being asked to respond to higher needs for capital.  A survey led by the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis showed the additional amount to meet Native CDFI financing needs in 2017 was $48 million. 
#5: Federal government program and agency support
A number of economic and community development programs can provide equity, loans, loan security, and other credit enhancements to help reduce any lending risk and provide worthwhile support.
The U.S. Department of Treasury’s CDFI Fund fosters partnerships and offers support through its Native Initiatives program.  In many cases, if you work at a community bank and a Native CDFI is in your bank’s assessment area, your bank establishment could leverage public funds to support technical assistance, trainings, and more.
Interested in growing your financial institution’s home loan portfolio? Section 184 Indian Home Loan Guarantee Program (HUD) provides a 100% loan guarantee to ensure your financial institution’s investment held in Indian Country trust lands will be repaid in full in the event of foreclosure. 
Your financial institution can also choose to make a small dollar deposit (under $250,000) to a Native CDFI with insurance from the Federal Deposit Insurance Corporation.  Credit unions participating in the Certificate of Deposit Account Registry Service can be insured if making a deposit over $250,000.