CDFIs in Puerto Rico Grow and Provide Support to Communities
For several decades, Puerto Rico has experienced profound natural, fiscal, and economic crisis that affected low- and moderate-income people and communities. Since 2018, Inclusiv has been working in Puerto Rico to strengthen a network of over 100 community-owned financial cooperatives to help them become vibrant CDFI platforms, through which public and private resources can reach low-income people and communities on the island. An important component of our work has centered around removing structural barriers for cooperativas to access resources and funding available for credit unions in the mainland U.S.
In the past, Inclusiv worked to help cooperativas overcome the language and technical barriers to registration on federal websites. This past year, with the pandemic, the experience was challenging. Unnecessary complications arose, including CAGE code applications that dragged out for months, laying bare structural barriers in the registration process for Puerto Rico-based organizations. In response, Inclusiv doubled its efforts in providing translation and technical assistance so members can apply for emergency federal assistance, including helping with online application and registration platforms. Thanks to the support of Prudential and Citi, Inclusiv provided assistance for 36 cooperativas to submit CDFI certification applications.
In March, as grant application deadlines neared, cooperativas' senior leadership grew frustrated and concerned for their communities in need of financial assistance. The possibility of losing out on millions in recovery funds was devastating. Inclusiv helped remaining ooperativas with their applications but, due to the nature of the issues, it became clear that more action was needed.
Inclusiv reached out to one of the most vocal voices for Puerto Rico in Congress, New York Representative Nydia Velasquez. When cooperativas faced challenges in accessing SBA systems to start offering loans to businesses in their communities during first round of the PPP, it was Rep. Velazquez who helped. Again, she sprang into action.
Inclusiv wrote a detailed letter outlining the challenges in detail. Within just a couple of days, cooperativas that had reported issues were reassigned or assigned their CAGE codes, allowing them to apply for funding—even those with challenges to their applications. This development brought relief for our members and gratitude for the swift and effective actions of Rep. Velazquez.
As our work in Puerto Rico intensifies, so has growth in Inclusiv membership. The impact of the Puerto Rico CDFI Initiative has resulted in the expansion of our network in the island to 70 cooperativas and growing. Currently, 30 cooperativas have received CDFI certification, and we expect the number to reach 50 before the summer. Twenty-seven financial cooperatives applied for the CDFI Rapid Response Program (RRP), which could potentially provide millions in funding to expand lending. Inclusiv also signed a Memorandum of Understanding with the Public Corporation for the Supervision and Insurance of Cooperatives (COSSEC), the island’s main regulator, to facilitate secondary capital investments and automate CDFI certification compliance.
For Inclusiv, it is a privilege to help cooperativas leverage the resources our member credit unions in the mainland have leveraged for decades now. We look forward to continuing to help cooperativas grow and provide support to the communities they serve.