Access to affordable capital has been an ongoing challenge for the Native CDFI industry. Over the past couple of years, First Nations Oweesta Corporation has been working diligently to address this challenge by developing a capital pool allowing us to leverage both our strength and the strength of the industry to harness larger amounts of capital. Through research and outreach across the Native CDFI industry, including working with a Steering Committee of Native CDFIs and interviews with funders, investors, experts, and key partners, we have developed a model for a unique Native CDFI Capital Pool. This pool is intended to leverage larger amounts of lending capital for Native CDFIs.
The pool is uniquely structured, relying on a membership-based model. Native CDFI members invest 5% of their overall loan request in the pool as a cash reserve. Members then receive up to $1,000,000 in capital. The capital pool offers members a choice of two financing products: (1) a low-interest loan or (2) a higher-interest loan with 10% grant combination. Loans carry a targeted 10-year term with an interest-only period (two years), then amortized over the remaining term of the loan.