Community Development Financial Institutions - March 21, 2024

A joint presentation was made to the House Commerce Committee on Thursday about Community Development Financial Institutions (CDFIs). Will Belongia (Executive Director, Vermont Community Loan Fund) opened up the presentation with an overview of CDFIs do. He shared that they are community-based organizations that expand economic opportunity and provide financial products and services to individuals and businesses often underserved by traditional financial institutions. The CDFI designation is given by the US Department of Treasury to organizations that have a primary mission of community development and a proven track record of providing financial products and services to underserved communities. CDFIs include credit unions, loan funds, venture capital funds, and banks. They go through a rigorous application process and must recertify every year.

CDFIs are required to deploy at least 60% of their financial activity into a target market to meet the annual certification requirements. Target markets can be specific areas that are considered economically distressed or can also be a specific population. For example, low-income individuals and their businesses, or Native Americans, people with disabilities, African Americans and several others. There are five CDFIs currently headquartered in Vermont.


They are:

  1. Flexible Capital Fund, L3C (FCF). Janice St Onge (President, FCF) noted that they had invested $9M in twenty-four companies who in turn leveraged $198M in debt, equity and grants. In 2022, FCFs companies spent $19.7M or 32 cents of every dollar in sales to purchases from local vendors.

    FCF is a women-led and managed for profit CDFI and high-touch investor focused on companies that are ‘built to last’ vs ‘built to flip’. FCFs mission statement is creating healthy food systems preserving working lands, building resilient communities and addressing climate change through regenerative solutions and equitable workplaces.

  2. Opportunities Credit Union. Kate Laud (President and CEO, Opportunities CU) focuses on six key areas of need as reflected in its 2023 impact study.
    1. They are focused on addressing the financial needs of low-income Vermonters.
    2. Their targeted loan portfolio is 77% of loans are to low-income Vermonters and 39% to people with poor credit histories.
    3. Making Housing more affordable and attainable.
    4. Accelerate homeownership with downpayment grants of over $1.1 M.
    5. Building a financial home for New Americans and refugees with sixty loans totaling over $8M including $7M for housing.
    6. Removing barriers for BIPOC Vermonters by providing 15 small business loans to minority-owned enterprises.
    7. Driving the growth of small business with over $2M in small business loans that ignited 33 new job opportunities.
    8. Removing barriers for disabled Vermonters with $1.6M in loans for equipment and modified vehicles that improved their access and independence.

  3. Community Capital of Vermont. Alex Rob (Executive Director) shared that the organization is a 501c3 non-profit that spun out of Capstone Community Action 25 years ago. They educate and lend to low-income business owners who cannot access capital. In 2023, Rob noted that 62% of its loans were to woman owned businesses 78% were to low-income entrepreneurs.

  4. NeighborWorks of Western Vermont. The organization was represented by Melanie Paskevich (Director of Operations). They are a non-profit housing organization with in-house financing, providing all the answers and support homebuyers and homeowners need. NeighborWorks focused on affordable rental housing, affordable home ownership, market rental housing and market home ownership. It provides lending for down-payment assistance and first-mortgages, home repair and rental repair, and energy efficiency. From 2019 – 2023 NeighborWorks provided 112 CDFI loans totaling $2.3M.

  5. Vermont Community Loan Fund (VCLF). Belonga talked about their formula of Impact + Sustainability + Justice equals opportunity. He said that the VCLF is a nonprofit-mission-driven community-focused alternative lender.  It’s been a CDFI since 1996 and is an economic development resource for affordable housing, local business, nonprofits and early care.  Belonga noted that $33M in private impact investor capital has been leveraged for public good and provides access to capital for ALL Vermonters.

    Since 1987 VCLF has loaned $140M to:
    1. Create or preserve jobs for 7,974 Vermonters.
    2. Build or rehabilitate affordable homes for 4,629 households.
    3. Create or preserve quality care for 4,913 children and families.
    4. Launch the Justice Forward Fund and made 33 loans to BIPOC entrepreneurs.
    5. Lend from 2020 through 2023 was 83% annualized growth rate!

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