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9. The Assets Framework: Moving Toward Transformative Transactions

Hannah Thomas

Community Development Financial Institutions (CDFIs) are community-based organizations that provide credit for communities not served by banks or credit unions. CDFIs are diverse in products and mission (Benjamin, Rubin, and Zielenbach 2004). Many offer transforming services – in addition to credit – such as regional business strategies, workforce training, business counseling, and homeownership and financial education. In a tighter funding environment, many CDFIs have been shifting their focus from communities to lines of business where they can break even. This may mean providing credit at the expense of transformational services. This potential shift raises questions about the value CDFI credit brings to a community and whether CDFIs need to refocus their mission and program design.

This chapter explores the value a CDFI can bring to a community through a case study of Coastal Enterprises, Inc. (CEI), a CDFI in Maine (for more information, see “About CEI" at “About CEI." ceimaine.org/content/section/3/40/). Recognized as one of the country's leading CDFIs, CEI approaches its work from a holistic perspective, recognizing that financing alone cannot develop a community's wealth. Two projects, the Progressive Alliance for Careers and Training (PACT) and the Working Waterfronts Program, offer examples of CEI's work in this arena. Important in this discussion are the underlying theoretical frameworks that inform community development finance. I propose that the market failure framework, traditionally the theory articulated for CDFI's work, is insufficient to account for the transformational activities of CEI. The assets framework incorporated into CDFI work in limited ways, proposes that holding wealth, whether financial or more intangible such as education or networks, provides a net benefit for individuals and communities. I develop an assets framework for understanding the value of a CDFI and propose the framework as a way to reposition how CDFIs work in communities.

 
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