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Community Scope

2016, Issue 2

National, State and Local Respondent CDFIs

National Respondent CDFIs

The 10 national respondent CDFIs represent both organizations whose sole function is standard CDFI lending activity, as well as organizations that fund subsections of large, national nonprofits that act as CDFIs. To illustrate this point, the number of full-time employees working for each national respondent CDFI ranges from two to 566. Those CDFIs that reported relatively low numbers of full-time employees are often housed within a larger nonprofit organization that provides the resources necessary to perform lending functions at a national level. The national CDFIs in the survey sample are headquartered in Arkansas, the District of Columbia, Georgia, Maryland, North Carolina and Virginia.

The median total asset range for national CDFIs is $10 million to $20 million. This range is less than the median asset range for subnational CDFIs ($20 million to $30 million), suggesting that the national respondent CDFIs are not necessarily the largest or most active CDFIs in the survey sample. They may instead be acting at the national level because of the scope of activity performed by their parent organization, or because they are operating in a relatively niche market that requires them to extend beyond state or local demand.

State and Local Respondent CDFIs

Nearly 90 percent of the 144 respondent CDFIs that answered the survey question on geographic service area indicated that they operate at a state or local (multi-county, single county, multi-city, single city, multi-census tract or single census tract) level. State and local CDFIs typically operate with smaller total assets and loan funds than their traditional financial institution counterparts, and primarily obtain their lending capital from regulated financial institutions and deposits. A larger percentage of state respondent CDFIs reported obtaining lending funds from the CDFI Fund (34.8 percent of state CDFIs compared to 14.5 percent of local CDFIs). Both subsets maintain similar percentages of high risk loans and leases in their portfolios, with a median of 3.4 percent for state respondent CDFIs and 3.0 percent for local respondent CDFIs.4 Figure 1 provides additional points of comparison between state and local CDFIs.

A geographic analysis of key target markets indicates that every county in the Southeast has at least one CDFI serving all of the five target markets represented in the 2015 survey: business, consumer, housing, nonprofit and community facilities. Unsurprisingly, the number of CDFIs that reported serving unique target markets varies by the total number of state and local CDFIs in the county. With some county-level exceptions, one or two state and local respondent CDFIs serve target markets in Arkansas, while sixteen state and local CDFIs serve target markets in Virginia. Similarly, every county in the Southeast has at least one CDFI providing each of the 16 products and services represented in the 2015 survey.5 Based on the survey responses, there do not appear to be areas in the Southeast completely devoid of   CDFI provision of financial products to target markets, although market demand in parts of the Southeast is high, and may be capable of supporting additional CDFI activity. Beyond the markets, products and services explicitly given in the 2015 survey, several survey respondents noted additional financing areas — including financing for charter schools, commercial energy loans and auto loans — that may deserve further analysis to identify potential unmet need in the Southeast.

Figure 1: Comparison of State and Local Respondent CDFIs

Source: Survey results from the Federal Reserve Bank of Richmond’s 2015 Survey of CDFIs in the Southeast.

N=128 CDFIs

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