NCRC’s Field Empowerment Fund Expands Funding for COVID-19 Economic Recovery

With support from Morgan Stanley, the first round of NCRC’s $5 million Field Empowerment Fund (FEF) provided unrestricted grants this year to 30 NCRC member community organizations to help them respond to economic challenges created by the COVID-19 pandemic. Targeting historically underserved communities, the grants were designed to implement and scale innovative investments that promote COVID-19 economic recovery.

Here are some of their stories: 

Capital Area Asset Builders

At the onset of the pandemic, a report from MorningStar found that low- and moderate-income (LMI) households saved $0.08 for every $1 that non-LMI households saved. Surviving a global pandemic now on pace to enter its third calendar year with critically low emergency savings, is an unfortunate reality for many Americans. Grant recipient Capital Area Asset Builders’ (CAAB) used FEF funds to provide financial support to low-income families impacted by COVID-19. Leveraging public and private dollars, CAAB addressed emergency needs for families most affected by the pandemic in the District of Columbia. The nonprofit served 251 low-income clients through five matched savings programs. The participants saved a total of $310,636 and received matched funds of $709,467 for a total benefit of $1,020,103.


Latino Economic Development Corporation

The Latino Economic Development Corporation of Washington, DC, (LEDC) used their FEF award to provide immediate financial relief to business owners impacted by COVID-19 by disbursing concessionary consumer loans and microloans. Recognizing a need for loan options with more generous terms than market rate loans, LEDC introduced the Resilience Loan. This loan provides a 0% interest rate consumer loan with a six month grace period on payments to help business owners cover personal expenses or reduce the high-cost debt they may have incurred due to COVID-19. The nonprofit also launched the Women Loan Fund to provide concessionary seed loans to help women start or consolidate business ideas. This seed loan has the same terms as the consumer loan and there are minimal qualification and underwriting requirements for both. Through FEF, LEDC was able to deploy 10 resilience and four seed loans to support business owners impacted by COVID-19.


Texas Association of Community Development Corporations

More than half of the nation’s consumers struggle with subprime credit which often blocks their access to affordable and safe consumer credit. The only option for many of these disenfranchised borrowers is high-cost financial services such as payday and auto title loans. In 2020, these predatory lenders charged borrowers approximately $1.4 billion in loan fees in Texas alone. The annualized finance fees on these expensive loans can be as high as 660% APR. Due to COVID-19, workforce challenges have become more prominent with reduced pay and increased expenses resulting in additional family financial distress. Many lower paid workers who previously struggled on two incomes are now reduced to only one income per household or less. As a result, workers need affordable credit more than ever.

Since program inception in 2011, the Community Loan Center of America (CLCA), managed by Texas Association of Community Development Corporations (TACDC), has helped coordinate the growth of the Community Loan Center (CLC), an affordable small-dollar loan program that is a better alternative to payday loans. This nationwide loan program has now made over 86,000 loans to employees around the country saving these borrowers as much as $60 million compared to the cost of using payday loans.

Although loans are available to all workers at participating employers, a borrower survey found that most CLC borrowers are LMI (77%), most borrowers are women (73%) and most are people of color (80%). CLC loans empower borrowers to cover unbudgeted personal expenses like medical bills or car repairs and can also help them avoid eviction or foreclosure.

TACDC has helped the CLC loan program expand from one lender in 2014 to over 20 lenders in 10 states today. The 2021 FEF grant allowed TACDC to continue to expand the CLC program by recruiting more CLC lenders and providing program training and technical assistance.

During this reporting period, the Community Loan Center network made 6,930 CLC loans to workers lending $6,779,506. These 6,930 borrowers saved an estimated $5 million compared to the cost of borrowing the same amount with payday loans. TACDC also provided training, technical assistance, marketing support, and when available, funding to new and established CLC local lenders. TACDC also hosted biweekly CLC network information exchanges, made numerous CLC program presentations to prospective CLC lenders and recruited a new CLC lender in Detroit.

NCRC is thrilled to see the impact grantees are making with the support of the Field Empowerment Fund. The program’s final report and second round of funding will be available in Spring 2022.

For more information about the Field Empowerment Fund, contact me at IAkinbowale@ncrc.org. For press inquiries, please reach out to Alyssa Wiltse at AWiltse@ncrc.org

Ibijoke Akinbowale is NCRC’s HCN Director.

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