Definition
Specialized financial institutions that provide credit, capital, and financial services to underserved communities and populations that lack access to traditional banking services.
Why It Matters
Community Development Financial Institutions (CDFIs) promote financial inclusion, small business development, affordable housing, and local economic growth in low-income or marginalized communities.
Example
A CDFI provides a microloan to an entrepreneur in a low-income neighborhood who was denied financing by a traditional bank.