Progreso Financiero Certified as Community Development Financial Institution
CDFI Fund recognizes innovative financial services company for success in extending financial credit and access to underbanked communities
Mountain View, Calif. (May 5, 2010) -- Progreso Financiero, an innovative and socially responsible lender providing underbanked Hispanics with access to mainstream financial services, today announced that it has been certified as a Community Development Financial Institution (CDFI) in recognition of its work helping borrowers build credit, move up the financial ladder, and achieve their lifelong aspirations.
Progreso Financiero is one of 800 community-conscious, responsible lenders working with financially underserved individuals and businesses that have been certified as a CDFI. Progreso Financiero helps to fill a gap in the financial system and an urgent need to extend services and credit to the underbanked now.
"We are extremely proud to have been recognized by the US Treasury for our work in the Hispanic community providing access to fair and affordable small loans," said James Gutierrez, founder and CEO of Progreso Financiero. "We measure success and social impact by our ability to help individuals with thin or nonexistent credit files build a successful credit history and become strong candidates for mainstream banking services."
The average Progreso Financiero borrower begins with no credit history. After three successful small loans that each average $900 over nine months, those same borrowers build to a credit score of 660. "Not having a credit score in America is like not having a face," observed Gutierrez. "Our borrowers want to move up in the world and provide a better life for their children, and we enable that by helping them to first build a credit score and then enter the world of mainstream financial services."
Despite adverse conditions in the economy over the past two years, Progreso Financiero has grown to service more than 40,000 loans and has opened 27 physical locations in California. The company has plans to fulfill more than one million loans by 2013 and expand into neighboring states.
This accelerated growth and demonstrated scale at high volume is due to the company's sophisticated credit model and technology infrastructure. Progreso Financiero has devised an electronic and proven credit model that incorporates more than 600 unique attributes to score prospective borrowers that fall outside of the credit norms.
The company has also built an automated application and underwriting process that has allowed it to quickly scale and outpace most micro-loan providers and CDFIs. In combination with its unique credit model, this enables Progreso Financiero to lend at fair rates and low, predictable losses to millions of customers at a fraction of the cost.
This ability to grow quickly and service such a large number of borrowers distinguishes Progreso Financiero as a new breed of CDFI uniquely able to serve as a conduit between large financial institutions and underserved or underbanked customers. Through the CDFI program, Progreso Financiero can partner with larger financial institutions for full CRA credit. These lenders and banks can lend their balance sheet to Progreso Financiero and, in turn, serve the millions of people in need of this access to credit.
"This is a tremendous model for leveraging private sector initiative and innovation to address public sector challenges," continued Gutierrez. "Progreso Financiero combines the innovation, scale and credibility necessary to provide underbanked customers with fair access to the capital and services they need."
The CDFI Fund is designed to promote access to capital and local economic growth in low-income communities across the nation through monetary awards and the allocation of tax credits. Through the CDFI Fund and its certified CDFIs, capital can be more effectively distributed to broader community initiatives. CDFIs provide important access to financial services and loans that would otherwise be unavailable through mainstream financial institutions.
More information about Progreso Financiero and its loan offerings is available at the Progreso Financiero website.
About Progreso Financiero
Based in Mountain View, California, Progreso Financiero provides an opportunity for the 23 million Hispanics in the United States who desire and deserve access to mainstream financial services. The company's sophisticated risk scoring system uses hundreds of traditional and non-traditional data points to make fast, fair and responsible automated credit decisions that others simply cannot make. Progreso Financiero engages with customers in their neighborhoods, in their language, and with familiar faces from the community in order to create a bond of trust. The company has locations throughout California and is currently expanding into Texas. For more information, please visit: www.progressfin.com.
The CDFI Fund was created for the purpose of promoting economic revitalization and community development through investment in and assistance to community development financial institutions (CDFIs). The CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994, as a bipartisan initiative. Since its creation, the CDFI Fund has awarded $1.11 billion to community development organizations and financial institutions.
For Progreso Financiero