What is a CDFI?
Community Development Financial Institutions (CDFIs) are community-based specialized financial institutions that serve low income people or businesses in economically distressed communities, often working in market niches that may be underserved by traditional financial institutions. CDFIs provide a wide range of financial products and services that help customers build wealth and achieve the goal of participating in the ownership society.
The types of products may be similar to those provided by larger, mainstream financial institutions such as mortgage financing for low income or first time homebuyers, small business lending and lending for community facilities. CDFIs generally lend to and make equity investments in markets not served by traditional financial institutions. CDFIs may offer more flexible rates and terms and provide services that will help insure that credit is used effectively. CDFIs include regulated institutions such as community development banks and credit unions, and non-regulated institutions such as loan funds and venture capital funds.
What New York State CDFIs Do
- Create market-based solutions that provide capital to chronically underserved New York communities
- Leverage federal and private dollars for economic development
- Are locally controlled and accountable to their target market
- Provide financial services and education for low income New Yorkers
- Promote responsible alternatives to predatory loans