CDFI Industry Analysis released by CDFI Fund and Carsey Institute

[Community Development Banking List]

Original message from: michael.swack@gmail.com

The Carsey Institute, under contract to NeighborWorks® America and the U.S.
Department of Treasury's Community Development Financial Institutions
(CDFI) Fund, conducted a detailed analysis of a large sample of community
development financial institutions (CDFIs) on issues of capitalization,
liquidity and portfolio, and risk management by CDFIs from 2005 to 2010.
The “CDFI Industry Analysis: Summary Report,” produced by the Center on
Social Innovation and Finance at the Carsey Institute of the University of
New Hampshire, looks at the performance of the CDFI industry from 2005 to
2010. The report was developed under contract with NeighborWorks® America
as part of the CDFI Fund’s Capacity Building Initiative.
“An important goal of the Capacity Building Initiative is being sure that
we are addressing the needs of CDFIs through the trainings and resources
that we offer,” said CDFI Fund Director Donna J. Gambrell. “The development
of this report is a key, comprehensive overview of how CDFIs are doing,
allowing the CDFI Fund to better pinpoint where we are needed in the
future.”
The data analysis suggests that CDFIs have succeeded in lending to and
investing in individuals and communities not served by conventional
financial institutions, while maintaining loan performance standards
generally equivalent to those of the conventional financial sector. While
it is true that “the costs of serving these individuals and communities is
somewhat higher” due to the technical assistance provided by CDFIs, said
report co-author Michael Swack of the Carsey Institute, “some additional
costs incurred by CDFIs could be mitigated” if as a group they undertook
certain changes in their operating procedures.

The range of time the report studies allows for an examination of how CDFIs
performed during the recession. Other topics the report covers include CDFI
portfolio performance, scale effects, the impact of operating expenses on
CDFI self-sufficiency, and the barriers to leveraging capital effectively.

Download the Report at
http://www.carseyinstitute.unh.edu/p...y-Analysis.pdf