This study, for the CDFI Research Consortium and housed at the Center for Impact Finance (CIF) at the University of New Hampshire, examined the landscape of Community Development Financial Institution (CDFI) loan funds in Michigan. The goal was to identify opportunities to expand the reach and impact of CDFIs in the state to increase equitable community investment. CDFIs are critical economic drivers that fuel sustainable community development by providing loans to those who typically lack access to traditional bank financing, a proven tool for aiding underserved communities.
The research focused on the capacity-building needs of Michigan’s CDFIs and sought to identify policy directions and solutions to drive more capital into low-income and underserved communities. The project was developed with the participation, support, and technical guidance of both the Michigan CDFI Coalition and the Detroit CDFI Coalition. Michigan is recognized for having a strong CDFI sector, with over 50 certified institutions, including loan funds, credit unions, and one CDFI bank (First Independence Bank). This research contributes to a more specified understanding of community development finance and how Michigan can strengthen its CDFI ecosystem.
The study employed a mixed-method, sequential research design, grounded in an appreciative, asset-driven approach. The methodological approach was informed by appreciative inquiry, utilizing a SOAR (Strengths, Opportunities, Aspirations, Results) strategic planning model to examine organizational and ecosystem development.
The research generated several policy-focused recommendations for Michigan’s two CDFI coalitions, the Michigan CDFI Coalition and the Detroit CDFI Coalition. The recommendations point toward a critical need for strategic collaboration, advocacy, and innovative approaches to funding and capacity building to ensure the sustained and enhanced impact of Community Development Financial Institutions across Michigan.
