Economic body building
What does a public policy workshop and one of North Carolina’s largest financial institutions have in common? They’re putting together what they hope are the ingredients to stimulate investment and to create jobs and wealth in an uncertain economy in the eastern part of the state.
The workshop, coming next month from the UNC School of Government in Chapel Hill, will cover promising strategies and tools for promoting economic development in the face of tight budgets and tough economic conditions.
It’s designed to help local officials understand the fundamentals of economic development in the current economic climate, helping participants understand what is required to attract and support private investment in their communities by examining various economic development strategies.
On the financial end, Natural Capital Investment Fund has announced a $1.6 million award from Wells Fargo Bank as part of its Diverse Community Capital (DCC) program.
NCIF, an affiliate of the national nonprofit Conservation Fund, is one of 15 Community Development Financial Institutions (CDFIs) selected to receive funds for the first round of the Wells Fargo DCC program, a three-year, $75 million program aimed at serving diverse small businesses.
The Wells Fargo funding helps disadvantaged farmers and business owners who lack access to financial resources diversify their enterprises and build greater financial stability, resulting in stronger local communities and the responsible use of natural resources. It expands access to capital in low-wealth and underserved communities in order to foster economic development and revitalization. Many of these communities have been left out of the financial mainstream, unable to access financial services and capital from traditional banks.
NCIF will use the $600,000 operating grant and $1 million low interest loan from the Wells Fargo DCC Program to expand its lending and assistance to minority farmers and small business owners, primarily in Eastern North Carolina.
In recent years, when the credit market tightened, large banks pulled back from small business lending and enacted tighter lending criteria. As a result, many entrepreneurs—even those that were previously able to secure small business loans—were left struggling to access the credit they needed to startup or expand their businesses and that’s where CDFI’s come into play.
CDFI’s are typically smaller institutions that are able to evaluate businesses – even farming – on a broad range of criteria—not just credit scores— and allow financial institutions to benefit from a close relationship with their borrowers. CDFI’s in the state are playing a growing role in filling the lending gap.
The Wells Fargo DCC program is a three-year, $75 million program that will distribute $50 million in debt (lending) capital and $25 million in grant capital to CDFIs. These funds are intended to be utilized by CDFIs to lend to diverse business owners, support initiatives (such as technical assistance, marketing, outreach) that increase access to capital, and help more diverse business owners get the coaching and education resources they may need. The program also has a social capital component, focused on activities to build effective support networks and social infrastructure among CDFIs for the purpose of increasing lending to diverse small businesses.
“Helping our farmers is a win win for the entire region,” said Bertie County Commissioner Tammy Lee. “Farmers put food on our table and clothes on our backs. With Bertie County being a farming community I am thrilled to see grants and loans available to provide assistance. Also, grants and low interest loans to help start up small businesses helps economic development. Our country was built on small business and small businesses will sustain Bertie County and the region for years to come.”
Lee attended the Balancing Nature and Commerce in Northeastern North Carolina workshop in Plymouth last fall. The workshop was sponsored by the Albemarle Commission, U.S. Fish and Wildlife, and the Conservation Fund.
“The Wells Fargo DCC Program will help NCIF take its commitment to serve diverse communities to the next level,” said Marten Jenkins, President and CEO of NCIF. “Social equity and positive environmental outcomes are two legs of our ‘triple bottom line’ approach, so we’re grateful to Wells Fargo for the opportunity to expand such an essential component of our work.”
The ‘triple bottom line’ is an accounting framework that incorporates three dimensions of performance: social, environmental and financial. It is also commonly called the three P’s: people, planet and profits.
“Wells Fargo is proud to support NCIF and the work they are doing,” said Jack Clayton, Piedmont East Regional President for Wells Fargo. “Investing in our communities is one of the most important things we can do as a company and directly connects with our vision and values. At Wells Fargo, we believe that we’re responsible for promoting the long-term economic prosperity and quality of life for everyone in our communities. If they prosper, so do we.”