Federal Fund Targets Investments in Underserved Communities

Where mainstream financial institutions fail CDFIs give hope

The staff at ECD/HOPE thought Murriel’s shop would make a sound investment, because it provided a critical service that gave local residents an affordable means of transportation to get to and from work, says William Bynum, CEO of ECD/HOPE, a credit union with 28,000 members, 11 full-service retail branches and eight lending offices in Mississippi, Louisiana, Arkansas, and Tennessee.

“Everybody unfortunately can’t go out and purchase a new vehicle,” says Bynum. “There are small entrepreneurs like Murriel across the country that are filling the gaps in communities that need the same tools and services that more prosperous communities have.”

Under President Barack Obama’s Recovery Act the CDFI Fund received an extra $100 million for CDFI program grants. If the 2010 budget is approved it will receive a 127% increase over the 2009 budget of $107 million, which will further help small businesses climb out of the credit crisis.

As for Murriel, he was able to buy the equipment he needed, and as a result he says his revenue increased by 10%, and productivity and sales increased also. He is also considering adding a fourth employee.

“I didn’t think it could be done,” says Murriel. “I went to all the big banks and they said I didn’t qualify. I think ECD was my only Hope.”

Resources:

Got a small business idea that needs funding? Visit your local CDFI or Community Development Entity (CDE) for loan eligibility information. Visit the CDFI Fund Website for a list of certified CDFIs and (CDEs) by state

Click here for resources on how to certify your financial institution or company as a CDFI:

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