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Why haven’t I heard of CDFIs before?


CDFIs are a tough acronym to remember. We get it. It stands for Community Development Financial Institutions – yet another mouthful. We think the easiest way to describe them is – lenders for the community.

So..say you have a dream of opening up your own business. You have the drive, a great idea, and all you need is to borrow a few bucks to get it going or keep it going. Unfortunately, your options are not so great.

Sorry to break the news, but not all lenders are the same and the online lenders you’ve heard of typically charge small businesses 6 to 7x more than large banks to access money. Yup.

But wait, this is where CDFIs come in! They provide small businesses fair capital and business coaching. And on top of that, they focus on segments like women and minorities that typically get ignored or rejected by major financial institutions.

So now you’re going: COOL! But why haven’t I heard of them before?

Don’t worry, you haven’t missed the latest fintech trend. The most financially savvy among us haven’t heard of CDFIs.

CDFIs have been around for over 20 years, but have mostly been working with banks and foundations. Their gig wasn’t to approach us – the everyday saver. A few more reasons you haven’t heard of them:

  • Marketing. CDFIs are awesome at fair and responsible lending. But most of them are non-profits and don’t have the large and expensive marketing budget to get the word out about their good work. Likely the best promotion CDFIs have received was through the Starbucks and Opportunity Finance Network partnership to launch Create Jobs for USA campaign started by Howard Schultz. You may have been one of the hundreds of thousands of individuals who contributed a total of $3.5 million to the successful campaign.
  • Access. Most CDFIs are set up to take in large dollar amounts from banks and foundations, not small dollar amounts from you and me. So if you called up a CDFI with your $25 check, it would be a tough road to navigate.
  • Understanding. There are over 1,000 CDFIs across the country. Folks just learning about CDFIs love their social mission, but can find it overwhelming in terms of which CDFI to work with and why. This is a key problem CNote is solving for.

So now you know. CDFIs are awesome, dedicated and doing great work every day. And CNote is excited to bring you and them together to create an incredible economic impact. That means more money and more jobs for women and minorities. It means more investment vehicles that represent your voice and your values. It means finally – finance we can be proud of.

– Cat Berman, Co-founder

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