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Proposed federal cuts to the Community Development Financial Institutions (CDFI) Fund budget put the future of CDFIs—and the communities they serve—at risk, as highlighted in a recent article by Arkansas Business Publishing Group.  (link)

CDFIs were established to close capital gaps in underserved areas, and they are federally required to direct at least 60% of their lending to disadvantaged communities, a category that encompasses much of Arkansas. The state ranks 6th in the nation for rural population (42%), and nearly half of Arkansas residents (47%) either live below the federal poverty line or are classified as ALICE (Asset Limited, Income Constrained, Employed), making access to traditional financial resources even more limited.


The good news: CDFIs are fulfilling their mission. From 2005 to 2022, CDFIs delivered $6.2 billion in loans across Arkansas.  In a review of the loans by Planning and Development District and by the Congressional District,  CDFIs are exceeding their goals.  Approximately:

80% of those loans were made in rural areas. 
80% of loans were directed to Planning Districts with poverty rates above the state average.
85% went to Congressional Districts where the ALICE population exceeded the statewide threshold.

CDFIs not only fulfill their mission of serving underserved communities, they also demonstrate strong financial stability and attract private investors and partners, bringing additional capital and resources into the state. Cuts to CDFI funding would limit access to financial services, especially in rural and economically vulnerable areas that rely most on these institutions.