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October 21, 2003
Community Development Financial Institutions Help Rebuild Post-9/11
    by William Baue

The National Community Capital Association unveils a report on the impact of CDFIs on post-9/11 lower Manhattan.

On September 10, 2001, the walk-in lunch and breakfast establishment Bits, Bites, and Baguettes had its busiest day since Robert Garber opened the business in 1997 in the shadows of World Trade Center (WTC) in Lower Manhattan. After the next day’s tragic events, Bits and Bites lay dormant under blankets of dust and debris and behind barricades for the next two months, devastating the business.

On November 19, 2001, Bits and Bites became the second business to receive assistance through the WTC Small Business Fund established by Seedco, a community development financial institution (CDFI), to assist those affected by the September 11 attacks. Mr. Garber received a wage subsidy for 10 employees as well as a $25,000 grant and a $100,000 loan, which he used to pay rent and utilities, replace destroyed inventory, and clean the soot-laden restaurant, among other things. Not only has Mr. Garber rebuilt the business to pre-September 11th levels, but also he has opened three new locations in Lower Manhattan with an additional $100,000 loan from Seedco, creating 25 new jobs.

"Seedco was absolutely the first source of funds,” said Mr. Garber. “They were very helpful and supported our staff."

Bits and Bites’ grant and loans represent just a few of the 3,093 post-9/11 financial transactions documented in a new report from the National Community Capital Association (NCCA), a national network of 150 CDFIs. Entitled Two Years After 9/11: A Report on the Unique Role CDFIs Are Playing in the Rebuilding of Lower Manhattan, the report surveys the $48.6 million distributed by CDFIs, which typically fill the gap unserved by traditional financial institutions.

"While millions of Americans, along with New York City, New York State, and the federal government, mounted a relief and recovery plan unparalleled in history, community development financial institutions played a critical and little understood role in assisting and revitalizing lower Manhattan in the two years since September 11th,” said Mark Pinsky, NCCA’s president and CEO. “CDFIs led the front-line response to help thousands of otherwise 'invisible' small businesses and nonprofit organizations survive and thrive in the aftermath of the September 11th attacks.”

Approximately 90 percent of the transactions studied, totaling $44 million, benefited the “ground zero” region in lower Manhattan below 14th Street. The loans in the study averaged $32,229, while the grants averaged $14,025.

Citibank (ticker: C) supported the research and writing of the study with a grant from the Citigroup Foundation. Citibank also supported the CDFIs more directly.

“We provided grants and loans to CDFIs because we knew they could get the capital to those organizations that are hardest to serve,” said Andy Ditton, Citibank’s community development director.

CDFIs are financial institutions that provide capital and support to enable individuals or organizations to develop and create wealth in disadvantaged communities or under-served markets. CDFIs include Community Development Credit Unions, Community Development Banks, and Community Development Loan Funds. Individuals and institutions can invest in the more than 800 CDFIs located in communities across the U.S. as well as CDFIs in other countries.


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