Capital Access Programs

Rationale

Capital access programs (CAPs) aim to encourage banks to make slightly more risky loans to typically more low- to moderate-income communities. With CAPs, borrowers and the lending institution pay an upfront insurance premium (3-7% of the amount of the loan). This amount is matched by the state and placed in a reserve fund at the originating bank. This pool of money protects the entire collection of CAP loans, therefore providing banks with more security for making loans to less conventional borrowers and, as a result, increasing investments in underserved populations. Measuring CAP lending in a state helps identify which states are actively seeking ways to promote asset building in underserved communities. Presently, 20 states are involved with CAP lending. States perform differently in the following aspects of CAPs: Volume of CAP lending Number of banks involved, Targeted lending (7 states), Low- to moderate-income areas (geographic targeting), Minority ownership, Female ownership, Disabled person ownership, Industry targeting.

About Measure

States that have capital access programs.

Source

U.S. Department of Treasury, Office of Community Development Policy. (2001). Capital access programs: A summary of nationwide performance. Washington D.C.: Author.

Delaware grants the First State Community Loan Fund a very small amount for Grant-in-Aid which may go to microenterprise. The state also grants the YWCA money for Grant-in-Aid but we could not confirm whether the money goes towards microenterprise.

The Texas Association of Community Development Corporations was able to get the Texas CDFI Fund established (funded) this last legislative session. The fund is set up to be open to all CDFI business models and is not exclusive to micro at all. It is possible that none of the money will go towards microenterprise.