History of CDFIs

CDFI Roots: The Self-Help Credit Movement

The CDFI concept is “part of a rich history of self-help credit. From the immigrant guilds of New York City’s Lower East Side and the Prairie Populists of the late 1800s, to African-American communities forming the first community development credit unions in the 1930s, communities have sought self-help credit solutions because traditional financial institutions have ignored or abandoned them. (From the CDFI Coalition, What Are CDFIs?)  

Early 1960s

The CDFI industry as we know it today begins taking shape; the first organizations dedicated to community development are established. They work to address poverty, with strong support from the government.

Early 1970s

CDFIs begin reaching out to private organizations for funding; the first business development loan funds are launched. In 1973, South Shore Bank in Chicago, the first community development bank, is established. In the same year, the Neighborhood Reinvestment Corporation (now known as NeighborWorks America) is formed.


The Neighborhood Reinvestment Corporation begins funding affordable housing in 1978.


At the midpoint of the 1980s, the National Community Capital Association (now known as the Opportunity Finance Network), a national network of CDFIs, is created.

Early 1990s

1990 marks the beginning of a period of great expansion in the CDFI industry. In 1992, the CDFI Coalition, a national organization promoting the work of CDFIs, is founded. The CDFI Fund, a federal government agency that certifies and provides funding to CDFIs, is established two years later.


Revisions made to the regulations implementing the Community Reinvestment Act explicitly recognize loans and investments in CDFIs.

Recent Years: Sustaining the CDFI Industry

Since the mid-1990s, CDFIs have had to pursue sustainability strategies in order to cope with several challenges, including demographic changes, declines in funding from philanthropic organizations, the foreclosure crisis, and the changing landscape of small business finance.