Washington, DC – U.S. Senator Tim Johnson (D-SD), Chairman of the Senate Banking, Housing, and Urban Affairs Committee, announced today that eight South Dakota community-based financial institutions have been awarded a total of $3,169,866 in grants from the U.S. Treasury Department. Organizations in Sioux Falls, Mobridge and Sisseton received funding through the Community Development Financial Institutions (CDFI) Fund. Organizations in Eagle Butte, Fort Thompson, Kyle and Pine Ridge were awarded funds through the Native American CDFI Assistance Program (NACA Program).
“CDFIs have a proven track record of spurring job creation and boosting economic growth in our communities that need it most,” said Johnson. “These awards will help entrepreneurs get capital to build start-ups, help developers build affordable housing and create construction jobs and help community organizations provide financial literacy training to South Dakotans across the state.”
CDFIs are specialized financial institutions dedicated to serving low-income individuals and communities that lack access to services from mainstream banks or financial institutions. CDFIs offer banking services as well as loans for small businesses, affordable housing projects and social service organizations. To help borrowers use credit effectively, they also provide services such as business planning, credit counseling and homebuyer education.
CDFI grant programs provide awards to certified and emerging Community Development Financial Institutions that specialize in assisting low-income communities. The CDFI Program is funded through an annual appropriation from Congress, and the awards are made each year through a competitive process.
CDFI Fund awards have had a tangible impact in the low-income communities they serve. According to the Treasury Department, in fiscal year 2011 alone, CDFI awards helped create or maintain over 25,000 jobs and provided financial literacy training to more than 177,000 people. The Treasury Department also reports that each federal dollar invested in a CDFI leverages $27 of private investment.
Below is a full list of the awards announced today with a short description of how the funding will be used:
Mobridge Economic Development Corporation, Mobridge - $62,850
Mobridge Economic Development Corporation will use the funding to expand small business loans in conjunction with financial management training and one-on-one counseling to small businesses in north central South Dakota.
Dakota Resources, Sioux Falls - $703,806
Dakota Resources will use the award to provide lending for capital investments in South Dakota communities.
Northeast South Dakota Economic Corporation, Sisseton - $210,000
Northeast South Dakota Economic Corporation will use this grant funding to help capitalize its revolving loan fund for business expansion or start-ups, community development, and affordable housing.
Four Bands Community Fund, Inc., Eagle Butte - $750,000
Four Bands provides small business loans, Individual Development Accounts, and a variety of education and development services to promote financial literacy and the expansion of locally owned private business. Its principal target market is the Cheyenne River Indian Reservation in South Dakota. Four Bands will use its award for lending capital and capacity building for the organization, including staff salaries, travel, training, and professional services.
Hunkpati Investments, Inc., Fort Thompson - $400,000
Hunkpati Investments Inc. (Hunkpati) provides microloans and credit builder loans to the Crow Creek Reservation in rural South Dakota. Hunkpati will use this award to increase its loan fund, to strengthen its loan loss reserves, and to train or hire staff.
Lakota Federal Credit Union Steering Committee, Kyle - $147,253
The Lakota Federal Credit Union Steering Committee is in the process of creating a Native CDFI that will provide consumer loans and other financial services to people living on or organizations serving the Pine Ridge Reservation in South Dakota. The Lakota Federal Credit Union Steering Committee will use this funding to establish a Native CDFI as a stand-alone organization and to increase its capacity to serve the Pine Ridge Community.
The Lakota Fund, Kyle - $145,977
The Lakota Fund provides products and services that include microloans, small business loans, business loans, credit builder loans, training, and technical assistance. The Lakota Fund will use its award to increase its capacity to serve the Pine Ridge Community.
Mazaska Owecaso Otipi Financial, Inc., Pine Ridge - $750,000
Mazaska Owecaso Otipi Financial Inc. (Mazaska) offers financial products and development services to individuals on the Pine Ridge Reservation. Mazaska will use this award to increase loan capital to meet demand, to hire a dedicated homeownership counselor, to provide development services, and to handle credit reporting.