Democratizing Finance cover

The History of Community Development Financial Institutions: Review

By Matt Cropp, Grassroots Economic Organizing

For those of us working to build the co-op economy in the U.S., Community Development Financial Institutions, or CDFIs, are strategically vital players in making more cooperation happen. Here in Vermont, knowing that the Cooperative Fund of New England (CFNE) can step up with a loan to low-wealth workers seeking to convert their employer to a worker co-op without requiring personal guarantees makes starting down that path feel possible to folks for whom business ownership has always seemed out of reach. Similar roles are played elsewhere in the country by the likes of Shared Capital Cooperative and the Local Enterprise Assistance Fund (LEAF). Though tiny compared to more traditional (and highly regulated) financial institutions (together, the trio of co-op-centric CDFIs boast about $50 million in assets), they nonetheless form a key foundation for so many possibilities for the solidarity economy. While being keenly aware of the importance of CDFIs, I had only the...