Low income loans not any riskier – General
WASHINGTON — Loans to low-income people and communities are no riskier than loans made to traditional, higher income markets says a recently released study. (Link to study at communityaction.ca)
The National Community Capital Association study demonstrates that so-called community investing loans for housing, child care and small business in depressed areas are no more risky than loans to conventional markets. The NCCA conducted a study of about $4 billion in financing by 107 community development financial institutions in distressed urban and rural markets across the United States.
While about eighty percent of that capital was used in community development projects in economically disadvantaged communities, the vast majority of beneficiaries to that money are low-income individuals. Women compose 49 percent of that group and minorities accounted for 47 percent.
In addition, the study reported that CDFI’S financing helped to create or maintain about 180,000 jobs and supported the development and expansion of 147,000 housing units and 2,500 community projects such as child care centres, senior centres and health care sites.
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