Earlier this month, Deputy Treasury Secretary Neal S. Wolin spoke
at the White House Tribal Nations Conference to outline Treasury’s
initiatives to support the economic development of Native Communities across
the nation. One program highlighted by Deputy Secretary Wolin was the Native
Initiatives, which has already helped many communities, and is administered by
the Treasury Department’s Community Development Financial Institutions Fund (CDFI
Fund).
The CDFI Fund’s Native Initiatives are a vital component of
Treasury’s strategy to promote economic growth in low-income and distressed
communities. Created in 2001, the Native Initiatives were specifically designed
to address the unique barriers that prevent access to capital and safe financial
services in Native communities—communities of Native American, Alaska Native,
or Native Hawaiian descent. Through a combination of awards that provide
financial and technical assistance and comprehensive training workshops, the
Native Initiatives have enabled the growth of Native Community Development
Financial Institutions (Native CDFIs) from just seven in 2001 to more than70
today.
The Native Initiatives continue to support this growing
financial industry and, toward that goal, today Treasury is opening the fiscal
year 2013 award funding round of the Native Initiative’s award program, the
Native American CDFI Assistance Program. Pending final Congressional
authorization, the 2013 round will provide up to $12 million in assistance to
Native CDFIs. One of the first Native CDFIs, and a true success story of the
Native Initiatives, is the Lakota
Funds. Lakota Funds serves the Oglala Lakota Oyate people on Pine
Ridge Indian Reservation in South Dakota; an area with one of the highest
poverty levels in the nation where it’s estimated that half of the population
lives below the Federal poverty level and unemployment ranges between 70-80
percent.
Starting off in 1986 as a microlender, Lakota Funds has grown
significantly and expanded its loan products to meet the unique needs of its
community. Lakota Funds has now made
more than $6 million in loans to 450 businesses and entrepreneurs serving the
Pine Ridge Indian Reservation. A critical component of this success was made
possible by the CDFI Fund, which awarded the Lakota Funds over $2.4 million through
nine separate grants that expanded its lending capacity.
The impact made by the Lakota Funds is very visible on Pine
Ridge, and can be seen in the craft shops, restaurants, and construction and
maintenance businesses that it has financed for Native residents. Some of the
entrepreneurs have been so successful they have returned to Lakota Funds for
additional financing to expand their businesses: Rosalie Red Elk and Ron Little
Thunder have received financing from Lakota Funds twice to allow them to
start-up and expand their quilting business, Rosalie’s Quilting. After using
the financing to purchase sewing machine equipment, Rosalie can now produce an
average of 160 star quilts monthly.
What will have an even greater impact is the new Lakota
Federal Credit Union, the first ever federally insured financial
institution located on the Pine Ridge Indian Reservation—the next closest one
is 45 miles away. A steering committee affiliated with Lakota Funds received
three separate awards from the CDFI Fund’s Native Initiatives to help stand up
the credit union, which will provide an alternative to predatory moneylenders
and check cashing services in the community. The credit union will provide
savings accounts, debit cards, and financial literacy programs. The Lakota
Federal Credit Union opened on December 1, 2012 to lines of people outside of
their doors.
Across the country, Native CDFIs similar to Lakota Funds
have established themselves as innovative financial institutions that are
driving economic development in Native Communities. . The continual demand for
this program ensures that future organizations will be able to expand their
ability to serve their local communities and to follow in the success of the
Lakota Funds. The CDFI Fund is also in the midst of developing a new study to
assess the availability of capital and credit in Native communities—more
information about the study can be found on the CDFI Fund’s website.
For more information about the CDFI Fund, the Native
Initiatives, or the CDFI Fund’s other programs, please visit www.cdfifund.gov.
Kimberly
Beauman is a Legislative and External Affairs Specialist for Treasury’s
Community Development Financial Institutions Fund.