Greetings, Agents of Impact!
Zoom in to today’s Call. What’s your prediction for 2021? Your plan? Your ask? Bring something to share on our last Agents of Impact Call of the year, today, Tuesday, Dec. 22, at 10am PT / 1pm ET / 6pm London / 9pm Nairobi. Zoom right in . Signals: Ahead of the Curve
U.S coronavirus relief package boosts lenders in underserved communities. The $900 billion stimulus bill set to be approved by Congress is being celebrated as a breakthrough for community lenders. “This is a powerful milestone for our field,” said Lisa Mensah of the Opportunity Finance Network , which had advocated for community development financial institutions, or CDFIs, and minority-owned depository institutions, or MDIs. The COVID-19 Emergency Relief bill, part of the larger government spending package, directs $12 billion to CDFIs and MDIs. That’s in addition to a $15 billion carve-out for such lenders in a fresh $284 billion round of the Paycheck Protection Program for struggling small businesses. The provisions are “a recognition of the role that we play that can’t be replicated by other institutions,” said Matt Josephs of the Local Initiatives Support Corp ., which, like other CDFIs, has tried to rush capital to businesses in communities that mainstream banks don’t reach ( see, “ Innovative CDFIs scale up to help underserved communities move from relief to recovery” ) . With COVID cases spiking and new shutdowns looming, he said, the bill comes “just in the nick of time.” Equity-like capital. The relief bill establishes a $9 billion Emergency Capital Investment Program, to be run by the Treasury, that will provide equity-like capital for minority-owned and CDFI banks and credit unions. Once signed, “Congress will have created the largest-ever fund with financial returns tied to impact objectives,” tweeted Calvert Impact Capital’s Beth Bafford . A $3 billion boost to the Treasury Department’s CDFI Fund, including $1.2 billion earmarked for minority lending institutions that predominantly serve communities of color, will support a broader group of CDFIs. The first tranche of emergency funds will be deployed over the next 60 days.
New Markets Tax Credits. The bill also reauthorized a key program relied upon by community developers to attract outside capital. The New Markets Tax Credit program was reauthorized for five years at $5 billion per year.
Dig in .
Short takes. Here’s a sampling of the reports and […]
