Treasury Department officials said the agency’s Community Development Financial Institutions Fund (CDFI Fund) has earmarked grants totaling over $10.8 million to help expand financial institution consumer access.
Officials said Community Development Financial Institutions (CDFIs) would benefit from the allocation via the Small Dollar Loan Program (SDL Program).
“I am proud to announce the inaugural round of Small Dollar Loan Program awards, which will help provide borrowers affordable alternatives to high rate small dollar loans and expand consumer access to mainstream financial products,” CDFI Fund Director Jodie Harris said. “Awards will provide CDFIs capital needed to establish loan loss reserves that are critical to the support of small dollar lending initiatives, as well as provide technical assistance to help build their capacity to operate small dollar loan programs.”
The SDL Program aids Certified CDFIs in addressing expansion of consumer access to mainstream financial institutions. The CDFI Fund enables grants for Loan Loss Reserves (LLRs) — establishing a loan loss reserve fund to defray the costs of establishing or maintaining a small dollar loan program and Grants for Technical Assistance (TA), supporting technology, staffing and other eligible activities allowing a Certified CDFI to establish and maintain a small dollar loan program.
With regard to the funding allocation, the Treasury Department indicated that of the 52 recipients, 13 SDL Program awards totaling nearly $3 million were awarded to recipients with headquarters located in what have been designated as Persistent Poverty Counties.