Community development financial institutions (CDFIs) are private financial institutions that are 100% dedicated to delivering responsible, affordable capital and services to expand economic opportunities to help low-income, low-wealth, underserved and other disadvantaged people and communities to join the economic mainstream. Typically, CDFIs are filling the capital market gaps created by traditional financial institutions (banks, funds, etc.). CDFIs can be banks, credit unions, loan funds, microloan funds, or venture capital providers.
Financial inclusion is where individuals and businesses have fair and equitable access to useful and affordable financial products and services that meet their needs that are delivered in a responsible and sustainable way. Financial inclusion strives to remove the barriers that exclude people from participating in the financial sector and using these services to improve their lives.
This term describes a spectrum of investment practices intended to generate social and/or environmental impact alongside financial return. Achieving social impact is not a secondary effect or secondary priority in decision-making. The hallmarks of impact investing are intentionality (clear intent to make a social impact), impact measurement and management, and some degree of financial return.
Program-Related Investments, Mission-Related Investments and Social Impact Investments.
Investments that are mission-aligned and can earn market-rates of return.
These investments can generate market or below market-rate earnings; the impacts generated generally will benefit broader society (not just low-income or underserved people/communities) and the impacts generated may not be completely mission-aligned.