Grand Rapids Opportunities for Women received a $400,000 grant to fund its small business development lending in economically disadvantaged communities.
The nonprofit said last week that it received the sum as a Community Development Financial Institution (CDFI) financial award. The nonprofit in 2016 earned its CDFI designation from the U.S. Department of Treasury’s CDFI Fund. This is Grand Rapids Opportunities for Women’s (GROW) second CDFI financial award since then.
Bonnie Nawara, CEO of GROW, said the funds will help the organization broaden its lending base to vulnerable areas. Currently, it provides microloan lending and technical assistance to small businesses in Kent, Ottawa, Muskegon, Newaygo, Allegan, Barry, Ionia, Montcalm and Kalamazoo counties.
“This money helps us to stabilize our lending portfolio and drive our focus to deploy funds into communities of color,” Nawara said.
CDFIs are certified by the U.S. Department of Treasury to inject new sources of federal capital into low-income communities and individuals who lack financing. Qualifying organizations are driven by a mission to offer affordable financial products and services that meet the needs of economically underserved communities. The CDFI program uses monetary awards and training opportunities to invest in and build the capacity of CDFIs, empowering them to grow, achieve organizational sustainability and drive community revitalization across the U.S.
According to the CDFI Fund Award Book, 375 organizations received a total of $187.3 million in awards. GROW was the only CDFI awarded in West Michigan.
Kelli Smith, GROW’s director of lending, said the grant underscores a new chapter for the organization.
“Nearly half of the counties GROW serves have poverty levels higher than regional and statewide rates,” she said. “The importance of small businesses and job growth cannot be understated when considering the economic distress of many of these communities. There is more demand for nontraditional capital in the West Michigan region than there are available funds.”
In 2019, GROW deployed $337,620 in loans to small businesses, 37% of which went to borrowers of color. About 74% of borrowers reported being of low to moderate income. In response to the pandemic, GROW has so far issued 41 loans totaling $382,000 through its ReStart Kent Loan Program.
“The impact of this funding will be substantial for our service area,” Smith said. “It will aid in the equitable support of small businesses, job creation and intentional investments into our local economy.”