Banks are meeting the needs of their communities by working together. Multibank community development corporations (CDCs) offer a collaborative approach that has been successful over the last two decades and, because of their flexibility, remain so today. They are designed to fill financial gaps through bridge loans, venture capital, or gap financing, when housing or economic development plans are good. MBCDCs can finance these projects because they spread the risk on projects that cannot qualify for conventional bank financing.
Tips for Creating For-Profit Multibank CDCs
Banks don't have to be large to meet the needs of underserved populations in urban or rural communities. Increasingly, banks of varying sizes are joining forces and sharing knowledge under the auspices of CDCs.
Orchestrating Community Economic Development
Multibank community development corporations are like orchestras. They bring together a group of experienced players who work jointly on projects to create something that they could not otherwise accomplish individually.
Gap Financing Leads to Economic Development
The 18 banks that formed the $10 million Arizona MultiBank Community Development Corporation (MultiBank) found success when they joined together 16 years ago to form a single entity. The entity was designed to spread risk and expense and concentrate expertise in the delivery of a special brand of community development financing. Today, MultiBank lent its initial investment nearly four times and continues to actively support emerging and underserved local markets in Arizona.