Given the critical role Community Development Financial Institutions (CDFIs) play in closing gaps in credit and capital access, the Federal Reserve continually updates our understanding of the challenges they face. We also want to identify opportunities for their growth. One important tool for collecting this information is the Federal Reserve’s biennial survey of CDFIs.
Previous Federal Reserve surveys and engagement with CDFIs revealed that demand for CDFI products and services was increasing prior to the COVID-19 pandemic, and has continued to increase. With this growing demand, CDFIs have increased lending products and services. They also want to expand offerings further with innovative opportunities to meet community needs. But operational challenges, particularly staffing, have limited CDFIs’ ability to meet demand and grow.
The success of CDFIs and the individuals and businesses they serve depends in large part on individualized services. These services include technical assistance, credit counseling, and financial education. To pay for staff and other operating expenses, CDFIs work continually to secure operational funding. And to secure operational funding, CDFIs must regularly work to show their effectiveness.
Community Development Financial Institution (CDFI)
CDFIs are mission-driven banks, credit unions, loan funds, and venture capital funds. They deliver a range of financial products and services to individuals and communities underserved by traditional lenders. CDFIs also provide an affordable alternative to nontraditional—sometimes predatory—lenders.
Digging deeper into issues affecting CDFIs
The 2023 survey will ask CDFIs about demand for their products and the challenges they’re facing in meeting demand. Gathering information on new products and practices that CDFIs have developed or aspire to develop is a key aim. Respondents will also have an opportunity to share their approaches and impediments to tracking their outputs and outcomes.
We hope you’ll share the survey with CDFIs in your professional network. If you are a CDFI leader, I encourage you to complete the survey. We want to hear from you! Your voice matters to help us understand the critical needs of CDFIs and the communities you serve.
2023 CDFI Survey—Understanding Capital
The survey was conducted April 24 – June 2, 2023. Findings are coming soon.