CDFIs are nonprofit lenders that play a critical role in the economy by bringing investment and resources to communities that have historically been undeserved by traditional finance.
Supporting Black-led Financial Institutions
Invest in Black-led CDFIs and Depository Institutions to Close the Wealth Gap
In the US, communities of color face persistent and institutionalized barriers to accessing capital. Community development financial institutions (CDFIs) and other Black-led financial entities have been found to align capital with justice and to work for communities of color, combating hundreds of years of systemic racism.
CDFIs are nonprofit lenders that play a critical role in the economy by bringing investment and resources to communities that have historically been underserved by traditional finance.
Black-led banks and credit unions, often headquartered in predominantly black neighborhoods, support the financial health and wellbeing of their communities and focus on serving Black-owned small firms, local organizations, nonprofits and Black families even in times of economic decline.
Despite the opportunity these financial entities represent to shrink the racial wealth gap, both within the CDFI and banking industries there remains a funding disparity between Black-led institutions and their white counterparts.
- In one study, it was found that white-led CDFIs held total assets of 6 times the amount held by POC-led CDFIs.
- Not only has the number of Black banks declined by over 50% since 2001, but as of the fourth quarter of 2019, Black-owned banks held 0.03% of the total assets represented by community and non community banks according to data from the FDIC.
Check out the map below to see the distributions of Black-owned banks across the US.
Partnering to Close the Wealth Gap
Funding disparities between Black-led institutions and their counterparts limit their ability to leverage resources for the communities they serve – typically communities of color.
At CNote we are committed to partnering with and investing in small and medium sized mission-driven lenders with particular focus on those led by People of Color. Expanding access to capital for Black banks and other financial institutions targeting underserved neighborhoods, particularly during a crisis, can help spur home and business lending to Black families and bring much-needed economic development to groups excluded from the financial mainstream.
Learn more about some of our partners and the transformative impact mission-driven lenders can have for Black communities and underserved populations more broadly.
Black-led Institutions Across the US
With the African American Alliance of CDFI CEOs, CNote is also working to catalog and publicly share a list of Black-led financial institutions to mobilize more equitable capital for marginalized groups across the US.
The list below can be filtered by keyword, state, and other criteria. When possible, we’ve tried to share website information so those interested can get in touch with leadership at these institutions themselves.
The goal of this initiative is to drive greater funding to Black-led institutions and address the persistent funding gap many of these Black-led organizations have and currently face, if not through CNote’s platform than through greater visibility and accessibility to those interested in investing.
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