Citigroup’s $200M Fund Eyes Under-Served Small Businesses

CitigroupCitigroup said it is launching a $200 million fund to generate small business lending in “low wealth and low income” U.S. communities.
The Communities at Work Fund is to provide financing to both nonprofit and for-profit Community Development Financial Institutions (CDFIs). The U.S. Treasury designates a lending institution as a CDFI if it has a local, targeted mission of funding community development projects.
“We recognize that too many small businesses, microenterprises, charter schools and community service institutions simply do not have access to credit, yet they are engines for economic growth,” said Citi Chief Executive Officer Vikram Pandit.
CDFI loan funds have been infusing economically distressed communities since 1994.  They channeled $1.4 billion in financing in 2008, and have provided $15.9 billion cumulatively to more than 48,500 small businesses.
Citi will partner with Calvert Foundation and Opportunity Finance Network (OFN). Citi will provide $199 million though a combination of equity and loans. Calvert and OFN will contribute the balance. The two organizations share expertise in CDFI fund management.
“By lending prudently and productively in markets outside the mainstream, the Communities at Work Fund will drive real change for underserved communities while working to provide financial returns for investors,” said Calvert Foundation President and CEO Shari Berenbach.
Over the past five years, Citi has provided CDFIs with more than $300 million in loans and investments.

One thought on “Citigroup’s $200M Fund Eyes Under-Served Small Businesses

  • May 7, 2010 at 9:30 pm

    I applaud you Vikrim Pandit! It is about time one of the big banks step up and try to reach REAL SMALL BUSINESSES.

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