While CDFIs and community lenders have existed for decades, Camino Financial and other CDFIs are well positioned to augment their impact thanks to the unprecedented capital commitments by public and private sectors. The Biden administration, banks, and corporations have committed over $40 billion in capital to CDFIs and Minority Depository Institutions (“MDIs”) in the form of grants and low cost debt. While it is clear CDFIs are a critical solution to finance underserved businesses, recent research reported by NYU Stern suggests FinTech lenders played a larger role in helping minority-owned businesses access PPP funding in 2020. Using loan size as a proxy for inclusivity of capital, 76% of FinTech PPP loans were below $22,880, compared to 52% of CDFI PPP loans were below the same loan size. The larger scale of FinTech lenders was also apparent in PPP lending, where participating FinTech lenders moved on average 52x more unique loan volume and 23x more loan origination dollars than CDFIs.
“As a neo-CDFI, we see the value in bridging the gap in capabilities between FinTechs and CDFIs,” said Kenny Salas, Co-Founder and COO of Camino Financial. “We plan to combine the infinite scale of our AI-powered machine learning and data aggregation models, with the lower-cost capital and resources available to CDFIs, to drastically lower systemic costs and increase accessibility to capital among Latino and other underserved business segments.”
The Company is actively engaging with community partners such as banks, corporations, government entities, and non-profit organizations seeking to further scale their impact in business communities of color.
“As a neo-CDFI, we’re inherently a community partner and not a challenger to banks or other traditional financial institutions. This gives us the flexibility to leverage the scale and infrastructure of our partners to drive long-term change for communities often overlooked,” said Sean Salas.
About Camino Financial
Camino Financial is the first AI-powered Community Development Financial Institution (“neo-CDFI”) expanding access to credit for underserved Latinx entrepreneurs in the U.S. The Company is uniquely positioned to offer affordable loans as it combines its proprietary AI technology with access to CDFI designated low-cost capital and resources. Camino Financial has also produced the largest bilingual content hub to empower Latinx entrepreneurs to thrive and graduate into lower cost, longer term credit products. The Company partners with banks, corporations and other community partners to educate and finance traditionally underbanked businesses. Together with its partners, Camino Financial is building the largest network of impact capital and financial resources to guide entrepreneurs along their proverbial “camino” (or “path”) towards building generational wealth for their families and communities.
SOURCE Camino Financial, Inc.
