Today, the Community Development Financial Institutions Fund (CDFI Fund) announced the winner of its 2015 Innovation Challenge. The winner, Association for Enterprise Opportunity (AEO), has been awarded a one-year contract to test an innovative way of partnering Community Development Financial Institutions (CDFIs) with small businesses in low-income areas that need investment.
“I am very proud to announce the winner of our Innovation Challenge, Association for Enterprise Opportunity,” said CDFI Fund Director Annie Donovan. “This is the first time the CDFI Fund has awarded a contract specifically to experiment with new tools to expand the reach of CDFIs nationwide. I am excited to see both what we will learn over this next year and how we’ll be able to apply those lessons to our future support of CDFIs.”
The CDFI Fund created the Innovation Challenge to seek new ways to expand or increase investments in underserved communities across the country, especially in rural areas. AEO won the Challenge with a proposal to develop a screening and assessment tool to match small businesses searching for loans from banks or online lenders with a CDFI that may be able to meet their needs when other lenders cannot.
Every business day, 8,000 requests for credit from small businesses are denied. Many small businesses that are unable to receive loans from a bank or online lender may be eligible for assistance from a CDFI. AEO’s tool will create a mechanism for small business lenders to refer potential borrowers to certified CDFIs. The tool will screen and sort the referrals and match them to partnering CDFIs, who will then review and assess the borrower’s profile and determine if they are a good fit for one of their loan products. The first cohort of CDFIs include: Access to Capital for Entrepreneurs (Georgia), the Intersect Fund (New Jersey), Justine PETERSEN (Missouri), and LIFT Fund (Texas).
The CDFI Fund will provide an update in 2016 on its lessons-learned from this initiative. The ultimate goal of the Innovation Challenge is to finance the development of a method, model, tool, or product that can be used by all CDFIs in the future. If the platform proves to be viable, it will be made available to any certified CDFI who wants to use it, expanding access to capital for small businesses operating in economically distressed areas.
Your email address will not be published. Required fields are marked *
Notify me of follow-up comments by email.
Notify me of new posts by email.
Sign me up for the newsletter!
Ola to invest $100mn in scooter sharing startup Vogo to power supply of 100,000 scooters
Aloft New Delhi Aerocity Associates With Putting Smiles For A Noble Cause
DOUBLETREE BY HILTON PUNE CHINCHWAD CREATED AN ECO-FRIENDLY CHRISTMAS TREE
Indian Overseas Congress, USA, New Jersey Chapter, celebrates Congress victory in States
EUPHORIA – LIVE IN CONCERT at Phoenix Marketcity, Mumbai (Kurla)
2014 The Global Indian New Network (TGINN)