Opportunity Finance Network Conference
Progreso Financiero CEO addresses transformative powers of giving the un-banked and under-banked access to credit
October 27-30, 2009
The 2009 Opportunity Finance Network Annual Conference—OFN's 25th—came at a time when CDFIs across the spectrum faced severe liquidity, portfolio, and operating challenges. Many also faced skyrocketing demand. At the same time, highly promising developments—CDFIs' access to economic stimulus funds, an increased CDFI Fund appropriation, and Federal Home Loan Bank membership for CDFIs, to name a few—provided CDFIs with big new opportunities.
The 2009 Conference curriculum was aimed at helping CDFIs navigate this "best of times, worst of times" scenario. A Stabilization and Growth core curriculum offered more than 30 sessions on portfolio and risk management, capitalization and funding, and operations and strategy. The core curriculum was designed to ensure that the CDFI industry emerges stronger at the end of the current crisis than it was at the start, and that the CDFI industry, the private financial sector, and government all work together effectively toward a common purpose.
CDFI Loan Funds and Consumer Lending: Challenges & Opportunities
In the current credit economy, CDFIs are looking for ways to respond to the needs of their underbanked and underserved communities. Several CDFI loan funds are expanding into consumer credit products offering payday loan alternatives, debt consolidation loans, credit builder loans, emergency loans, car loans, appliance loans, and more. However, many other loan funds are mired with questions around interest rates, scalability, state lending licenses, consumer lending regulations (i.e., Reg Z), and additional consumer disclosure requirements. The session brought together the experience and learnings of leading and emerging CDFIs that have been researching, launching and offering consumer loan products.
James Gutierrez, CEO and Co-founder of Progreso Financiero, addressed how regulators and government need to pay more attention to how demand for small dollar loans in certain communities can be met with alternatives to payday loans. He explained how "the largest challenge is how to meet the $40 billion per year demand for pay day loans, and cutting off supply without offering an alternative will likely push more segments into the margins of mainstream financial services." He continued by remarking "the challenge for CDFIs is achieving a scale that matters, which usually goes hand in hand with building an operating model that is sustainable".
Vikki Frank, Credit Builders Alliance
About Opportunity Finance Network
Opportunity Finance Network is the leading network of private financial intermediaries with a proven expertise in lending prudently and productively in unconventional markets often overlooked by conventional financial institutions. It delivers sound financial returns and real changes for people and communities.