7 Reasons Community Development Financial Institutions Lack Investors

Community development consultant Rosalie Sheehy Cates asks: What does it take for community development financial institutions to reach impact investors as a new source of capital?

Community development financial institutions (CDFIs) are seemingly the perfect fit for impact investors: they're staffed with seasoned financiers that have established relationships in low-income communities.

But a study by the Triple Bottom Line Collaborative found that there were several barriers between CDFIs and investors.

The first one? Simply being seen.

Cates writes, "As successful as our affordable housing and business lending is for our communities, TBLC found that CDFI lending and affordable housing is largely invisible to the wider world of private investing. TBLC also found that community organizations are frequently written off as a “government programs” or as risky, shoestring operations. Our first job is to visibly position CDFIs (and our borrowers) as effective and well-managed social enterprises."