What is a CDFI?
Community Development Financial Institutions (CDFIs) lend money to people and in places where conventional lending is scarce.
They provide access to credit and specialized loan products for people who may not qualify for a typical bank loan but work with the CDFI to establish credit worthiness and long-term plans for financial success. CDFIs also fund development projects in real estate markets that are unproven but are worthy of investment, helping to unleash long-term market potential and revitalize communities.
What is the Ohio CDFI Network?
Ohio’s CDFI loan funds established a professional network to share best practices and collaborate on shared issues.
In September 2018, GOPC released Building Assets: Ohio’s CDFI Industry. This report analyzed the impact of Ohio’s 18 CDFI loan funds and recommended that:
CDFIs should strengthen the ecosystem they work within
CDFIs should work to educate partners and local banks of their work
CDFIs should adopt the mindset they are uncovering latent markets, rather than responding to markets
Maximum CDFI impact can be found when vibrant community institutions are present, like banks, competent real estate developers, supportive community groups, and dynamic business and city leaders. Ohio’s CDFIs have asked GOPC to steward and staff this network.
The Impact of CDFI Lending in Ohio’s Communities
CDFIs provide critical capital for neighborhood revitalization, affordable housing development, and the establishment of other community assets.
Despite often making unconventional loans, the CDFIs in Ohio maintain very low default rates, comparable to those of conventional banks. Because of their imperative to do business by assessing risk differently than conventional banks, CDFIs help individuals start businesses, create jobs, and build wealth. A robust CDFI sector in Ohio can continue to benefit communities throughout the state that are aiming to strategically position themselves for the future.