Citigroup teams with nonprofits to spur small business lending
Citigroup is investing nearly $200 million in community development financial institutions – CDFIs – that make small business loans in low-income areas.
The third-largest bank in the country has teamed up with the Calvert Foundation and the Opportunity Finance Network to run the Communities at Work Fund. The fund will make loans to CDFIs across the country. These institutions will then lend to entrepreneurs looking to start a corporation.
Mark Pinsky, CEO of Opportunity Finance Network said that the need for small business loans has been enormous.
Citigroup officials say that the program allows them to make loans in places the bank otherwise wouldn’t reach.
“It’s the kind of thing banks should be doing. We hope as things go along, other people will get involved,” Citigroup CEO Vikram Pandit told the Washington Post.
Bloomberg says CDFIs have recently taken an expanding role in small business lending. Cumulatively, the institutions’ loan funds have helped more than 48,500 small businesses by loaning $15.9 billion.
Citigroup is the latest bank to use CDFI’s to help jump-start small business lending. Goldman Sachs previously announced plans to loan $250 million to CDFI’s as part of a bigger small business loan program.