Chrystel Cornelius, Executive Director of First Nations Oweesta Corporation
A diverse network of financial institutions have invested in an aggregate $10 million capital pool created by First Nations Oweesta Corporation. The first-of-its-kind capital pool will scale up Oweesta’s efforts to provide long-term, lower-cost capital to Native Community Development Financial Institutions (CDFIs).
“We’re going to see a phenomenal increase in economic development activities, and it will affect thousands of tribal members throughout the nation,” said Chrystel Cornelius (Ojibwe; Oneida), Oweesta’s Executive Director.
Oweesta, the only Native CDFI intermediary, received the final investment to meet the $10 million mark for its Native CDFI Capital Pool in June. “I’m happy to say that we recently closed with gap, and we now have the full $10 million for these 13 Native CDFIs to expand their economic development efforts, to expand businesses within these reservations, to expand homeownership,” Cornelius said.
Cornelius emphasized that the structure of the Native CDFI Capital Pool isn’t the most innovative aspect. “It’s that we were finally able to garner a mixed and diversified set of financing for this pool,” she said.
“AMERIND Risk and Bank of America both came in as the highest investors at $3 million each,” Cornelius noted.
Other investors include: Northwest Area Foundation, Enterprise Community Partners, The Bush Foundation, First Nations Development Institute, Wells Fargo, Kalliopeia Foundation, Tamalpais Trust and Oweesta.
The fact that a dozen financial institutions and Native organizations invested in Oweesta’s capital fund with a maximum 2 percent rate of return on investment is a testament to greater trust in the efficacy of the Native CDFI industry. The first Native CDFIs formed 20 years ago, and have since transformed opportunity across a traditionally undercapitalized Indian Country. These local, tribal lending institutions have become anchor institutions within their communities.
“Our more tenured [Native CDFI] organizations have really built up the economic fabric within their respective tribal communities, and tribal members have increased their appetites to expand their personal assets,” Cornelius said.
Climbing capital demands across Indian Country were reflected in a 2012 Oweesta-sponsored Access to Capital study of certified Native CDFIs. It revealed that as Native economies grow, Native CDFIs are being asked to respond to higher needs for capital. A survey led by the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis showed the additional amount to meet Native CDFI financing needs in 2017 was $48 million.
In addition to lending activities, Native CDFIs provide education, financial literacy, homebuyer education and business development courses. “Native CDFIs may offer a credit repair loan, credit advancement loan, emergency loan, small business loans and all types of financing for homeownership endeavors. These institutions have really become pivotal in building the private sector economy in reservations across the United States,” Cornelius said.
The 13 Native CDFIs receiving funding are: Chi Ishobak, Citizen Potawatomi Community Development Corporation (CPCDC), Cook Inlet Lending Center, First American Capital Corporation (FACC), First Nations Community Financial, First Ponca Financial, Four Bands Community Fund, Four Directions Development Corporation (FDDC), Lakota Funds, Mazaska Owecaso Otipi Financial, NACDC Financial Services, Northwest Native Development Fund (NNDF), and Tiwa Lending Services.
By Andrew Ricci - Native Business Contributor