Rising interest rates have made it harder for CDFIs to offer affordable loans to small businesses, first-time homebuyers, and others in the communities they serve.
A total of nine states now have state-funded CDFI programs, most of which were started during the Biden administration. The programs help CDFIs provide less expensive loans.
“In this high-interest-rate environment, it’s really hard for us to access enough low-cost capital that we can make affordable loans to small businesses,” —Elissa Sangalli, President and CEO of Michigan-based CDFI Northern Initiatives.