Supporting Rural Prosperity: The Urgent Need to Educate About the Value of Native CDFIs
Supporting Rural Prosperity: The Urgent Need to Educate About the Value of Native CDFIs
March 21, 2025
BISMARCK, ND – The Native American Agriculture Fund (NAAF) aims to raise awareness about the vital role of Community Development Financial Institutions (CDFIs), particularly Native CDFIs, which are essential to fostering economic resilience and opportunity in America’s rural and Tribal communities. As we navigate the evolving economic landscape, it is essential to focus on strategies that stimulate growth and promote long-term stability. We aim to create an environment where innovation thrives, jobs are created, and businesses flourish in rural communities.
Recent executive actions propose changes that could affect the federal Community Development Financial Institutions Fund, a cornerstone for providing financial support to areas traditionally underserved by conventional banks. Understanding the impact of such changes is crucial for stakeholders across the nation.
Native CDFIs have been instrumental in delivering tailored financial solutions that respect the unique legal, cultural, and economic needs of Tribal and rural communities. Our own support for Native CDFIs has shown us that they help drive local economic development by providing access to necessary capital for small businesses, supporting affordable housing initiatives, and invigorating agricultural enterprises—thereby enhancing community resilience.
NAAF provided more than $30 million in funding to 26 Native CDFIs, which has fueled a robust expansion in agriculture lending and infrastructure development over the past six years. This strategic investment opened tremendous opportunities for economic diversification in rural areas, improving the quality of life for all residents, not just Tribal members. By continuing to support and expand these initiatives, we can unlock the full potential of rural communities, fostering sustainable growth and prosperity.
CDFIs have historically garnered substantial nonpartisan backing due to their profound impact on revitalizing local economies. Initial resistance from traditional financial institutions has largely dissipated as the benefits of collaborating with CDFIs have become evident. Many individuals who start with CDFIs ultimately transition to larger financial institutions as their financial capacities expand, highlighting the foundational role that CDFIs play in credit education, awareness, and rehabilitation. There is opportunity for CDFI collaboration to successfully deliver crucial financial services to millions of working families, thereby bolstering business growth and fostering economic empowerment and sustainability for all communities. In certain parts of the United States, it is estimated that up to 82% of Native American land is leased to non-Native producers. These leases play a crucial role in the production of food, fuel, and fiber, underscoring the interconnectedness of Native and non-Native agricultural activities. Supporting Native CDFIs means advocating not only for Native prosperity but also for the broader rural economy, which relies on these lands and their water rights.
An exciting development in the financial landscape is the opportunity for Native CDFIs, Native banks and other lending institutions to partner with the Farm Credit System through the creation of Native Agriculture Financial Services (NAFS) to bring much needed capital access into Tribal and rural communities. This new entity is ideally positioned to enhance agricultural financing and contribute to an impactful solution that drives long-term economic growth development.
As changes in federal support are considered, it is important for policymakers, business leaders, and community members to be informed about the indispensable role that CDFIs play. By raising awareness, we can ensure that the conversation around these financial institutions is informed and constructive.