Bloomington launches pilot program to help fund community development

Community Development Financial Institutions, or CDFIs, finance underserved markets and populations but traditionally are not within markets of Bloomington’s size.

Mayor John Hamilton hopes to change that through financial incentives and by promoting more than a dozen projects, including affordable housing developments, child care centers and community-oriented businesses. Hamilton is asking that $2 million of local public funding be dedicated to attracting outside financing, with a goal of leveraging that initial investment into $4 million from outside private investors.

“Bloomington will benefit from CDFIs and the expertise they bring to make capital fit local needs,” Hamilton said in a news release. “Smaller markets like ours usually don’t have access to CDFIs, so we’ve had to be creative. This innovative CDFI Friendly City approach we are launching today is informed by decades of experience in larger cities, but is uniquely designed to support small urban and rural communities.”

These types of financial institutions act as nongovernmental intermediaries between traditional banks and “risky” investments designed to improve a community, such as nonprofit enterprises and some small businesses.