December 12, 2011; Source: MarketWatch | As a part of its intention to help expand the capital available to nonprofits, Kresge was announced it will augment grantmaking with a more aggressive use of program related investments, loan guarantees, and other forms of social investments, the Kresge Foundation today announced a major loan investment in community development financial institutions. It will collaborate with the Wells Fargo Foundation and the John D. and Catherine T. MacArthur Foundation to fund as many as five community development financial institutions per year through the NEXT Awards for Opportunity Finance. Those awards are administered by Opportunity Finance Network, the leading national network of community development financial institutions.
The interest rate on loans made through the Opportunity Finance Network loan is 1 percent and the foundation’s investment will evidently be used to help expand access to capital to areas that are now underserved by CDFIs.
This is not the first such investment for Kresge, Three years ago the Michigan based foundation made a $2.5 million loan and a grant to the Illinois Facility Fund, The investment helped the community development financial institution expand and it now does business in five states.—Ruth McCambridge