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The Community First Fund has spent 17 years proving that lending to poor people is good business.

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JohnWxy Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-16-09 06:17 PM
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The Community First Fund has spent 17 years proving that lending to poor people is good business.


"Even with its riskier portfolio, Community First Fund held loan charge-offs to less than 2% in 2008, while some big, sophisticated banks took enormous financial hits and a slew of subprime lenders failed. Nationwide, loan losses at other CDFIs are comparable or even lower."




http://www.usatoday.com/money/economy/2009-04-15-commun...


LANCASTER, Pa. The Community First Fund has spent 17 years proving that lending to poor people is good business. It may soon get millions of dollars in fresh capital to help press its case.

A little-known provision of the massive $787 billion stimulus law recently passed by Congress doubles federal funding for so-called Community Development Financial Institutions (CDFIs) such as Community First Fund. That includes local thrifts, banks and non-profits that serve low-income neighborhoods often ignored by large institutions or exploited by high-cost predatory lenders. President Obama's 2010 budget includes more money for the financiers, to help distressed areas hit hardest by the recession.


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Even with its riskier portfolio, Community First Fund held loan charge-offs to less than 2% in 2008, while some big, sophisticated banks took enormous financial hits and a slew of subprime lenders failed. Nationwide, loan losses at other CDFIs are comparable or even lower. But if the downturn is deeper than expected, community lenders could face wrenching choices.

"We have more demand than capital," says Mark Pinsky, CEO of the Opportunity Finance Network, a consortium of CDFIs around the country. In the past 30 years, the so-called opportunity finance industry has lent more than $25 billion with net charge-offs of less than 1%.

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