The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) awarded more than $11.4 million in grants to Community Development Financial Institutions (CDFIs) today through the fiscal year (FY) 2022 round of the Small Dollar Loan Program (SDL Program). The awards will help expand consumer access to financial institutions by providing alternatives to high cost small dollar lending.
“The FY 2022 Small Dollar Loan Program awards will help more CDFIs provide safe alternatives to costly payday lenders,” said CDFI Fund Director Jodie Harris. “In today’s economic climate, so many Americans live paycheck to paycheck. I’m proud that these awards will expand the access to affordable small dollar loans for underserved and distressed communities.”
The SDL Program helps Certified CDFIs address the issue of expanding consumer access to mainstream financial institutions and provide alternatives to high cost small dollar loans. The program was also created to help unbanked and underbanked populations build credit, access affordable capital, and allow greater access to the mainstream financial system. Through the SDL Program, the CDFI Fund provides Loan Loss Reserves (LLR) awards to enable CDFIs to establish a loan loss reserve fund to defray the costs of establishing or maintaining a small dollar loan program; and Technical Assistance (TA) awards to support technology, staffing, and other eligible activities to enable a CDFI to establish and maintain a small dollar loan program.
For the FY 2022 SDL Program funding round, a total of 66 Certified CDFIs received $11.4 million in awards. Of those CDFIs, 57 received $10.5 million for a combination of TA and LLR awards, five received $424,067 in TA awards, and four received $439,002 in LLR awards. The Award Recipients include 34 credit unions that received $6.6 million; 22 loan funds that received $2.8 million; and 10 banks or bank holding companies that received $2 million. Thirteen Award Recipients are Minority Depository Institutions; they received awards totaling $2.9 million.
The 66 Award Recipients are headquartered in 23 states, the District of Columbia, Guam, and Puerto Rico. Seventeen Award Recipients are headquartered in Persistent Poverty Counties. They received SDL Program awards totaling nearly $3.7 million, or 32.8% of total funds awarded, which exceeds the Congressional mandate of 10%. Persistent Poverty Counties, per Congressional guidance, are those counties that have experienced poverty rates of at least 20% over the past 30 years as measured by the 2011–2015 five-year data series available from the American Community Survey of the U.S. Census Bureau.
The full list of Award Recipients is below. For more information about the SDL Program, visit the CDFI Fund’s website at www.cdfifund.gov/sdlp.