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A roundtable discussion hosted by the Center for Rural Pennsylvania Board of Directors examined the data which revealed the degree to which rural areas in the state are benefiting from funding from Community Development Financial Institutions.
The discussion was held at the Pennsylvania College of Technology recently.
"CDFI's provide a valuable service in supporting economic growth and stability in communities across the United States," said Sen. Gene Yaw, chairman of the center's board.
"The Center's research findings suggest business CDFI loans are much more common in urban counties than in rural counties in Pennsylvania," Yaw said.
According to the CDFI Fund, a program of the Treasury Department, CDFI's are certified financing entities which offer affordable financial products and services that "meet the needs of economically underserved communities."
These can take the form of low-interest business loans for first-time home buyers, for small business creation and support and to help consumers rebuild their credit scores, according to information from the center.
The analysis examined three federal fiscal years: 2018, 2019 and 2021. The year 2020 was analyzed separately due to the impact of federal and state spending in response to the COVID-19 pandemic. The Center also evaluated loans that crossed county or state lines in a separate analysis.
Research shows 19 rural counties, over one-third of all rural counties, did not receive a business CDFI loan in those three years. While significantly fewer loans were provided to rural businesses, loans issued to rural businesses were of a higher value than those received by urban businesses.
Compared to other states, Pennsylvania businesses received fewer CDFI loans, overall, according to the news release. Across the United States, rural businesses received 27% of the CDFI loans and urban businesses received 73%. However, the loan values were more evenly distributed. Forty-five percent of the loan value, $15.1 billion, went to rural businesses and 55%, $18.3 billion, went to urban businesses.
Jason Fink, president/CEO of the Williamsport/Lycoming County Chamber of Commerce also commented on the findings.
"The report by the Center for Rural Pennsylvania on CDFI's here in the Commonwealth was very helpful as a rural county," Fink said.
"CDFI's can play a helpful role in advancing small business development as demonstrated in areas where they have been active. Unfortunately, they aren't involved in many rural counties in Pennsylvania as evidenced by the report. We are looking forward to utilizing this report to advance discussions on how this key economic development tool can be made available to all counties in Pennsylvania, including those here in the rural sector."
Abbi Peters, COO of the PA Wilds Center and co-founder of the Wilds Cooperative of PA, also took part in the discussion.
"Community Development Financial Institutions (CDFIs) play a significant role in providing loans and building credit in underserved areas," Peters said.
"The findings reveal that CDFI lending and services are insufficient in rural communities throughout the Commonwealth, including the PA Wilds. The findings of this study may also serve as a reference point for policymakers, industry players and other stakeholders concerned with enhancing financial inclusion in rural communities," she said.