Although an official date has not been announced, qualifying credit unions can apply for the CDFI Fund’s Small Dollar Loan Program grants this spring. In preparation for applying, interested credit unions can learn more about the Small Dollar Loan Program in a webinar on April 27.
The Small Dollar Loan Program provides grants for loan loss reserves and technical assistance to enable certified CDFIs to establish and maintain small dollar loan programs to address the issues of expanding consumer access to mainstream financial institutions and providing alternatives to high-cost small dollar loans. The program is also intended to enable award recipients to help unbanked and underbanked populations build credit, access affordable capital and allow greater access into the mainstream financial system
Small Dollar Lan Program grants may only be used to support small dollar loan programs that offer small dollar loans to consumers that:
- are made in amounts that do not exceed $2,500;
- must be repaid in installments;
- have no prepayment penalty; and
- have payments that are reported to a least one of the consumer reporting agencies that compiles and maintain files on consumers on a nationwide basis.
The inaugural round of awards were made in September 2021. A total of 52 CDFIs received $10.8 million in FY 2021 Small Dollar Loan Program awards, according to the CDFI Fund.
More information and eligibility requirements regarding the Small Dollar Loan program is available on the CDFI Fund website. In addition, more information about becoming a CDFI-certified credit union is available on the Inclusiv website. Inclusiv is a strategic partner of the New York Credit Union Association.