Opportunity Finance Network to Manage New Finance Justice Fund
Twitter has joined with the Opportunity Finance Network (OFN) to launch the Finance Justice Fund that will assist underserved communities, supporting the creation of small businesses, access to affordable homes and other initiatives to bolster economic opportunity. The new socially responsible fund is expected to attract $1 billion in capital from corporate and philanthropic partners to tackle racial injustice and poverty by lending to Black, Latinx, Indigenous, and rural borrowers across the U.S.
Twitter’s $100 million commitment as the first corporate investor in the Fund will result in long-term, below market rate loans. In addition, a $1 million grant by Twitter will foster ongoing contributions for the fund and facilitate the disbursement of loans.
Minority and women-owned businesses historically have had challenges gaining timely access to capital to build their businesses. This fund dovetails well with the Investing in Opportunity Act passed in 2017 and co-authored by Senator Booker that established Economic Opportunity Zones for distressed communities in 18 states.
OFN’s national network of community development financial institutions (CDFIs) that focuses on low-income and other under-resourced communities will manage the fund. Through 2018, OFN’s network originated $74.2 billion in financing among rural, urban, and Native communities resulting in over 1,560,000 jobs and the starting or expanding 419,177 businesses and microenterprises. The newly established $1 billion fund offers further inroads into bringing economic opportunities to struggling communities.
“I commend Twitter for stepping up as the first corporate investor, for investing substantial capital, and for making a large grant to a fund that will deliver loans through CDFIs to underserved people and places across the country,” said Lisa Mensah, President and CEO of OFN, advocating for other corporate investors to join.
Twitter also established a new partnership with the non-profit Operation HOPE that offers financial literacy and economic inclusion for underserved communities. A portion of the returns from the below market rate loans made to CDFIs will fund five Operation HOPE Inside centers. Local businesses and people will receive financial coaching and tools, primarily as clients of Black banks, minority-serving financial institutions or institutions serving underserved communities across the U.S.
“Twitter is proud to partner with OFN and Operation HOPE to bring more support to Black, Latinx, Indigenous, and rural borrowers,” said Ned Segal, Chief Financial Officer of Twitter,” recognizing the importance of minorities and women to have access to resources for the startup of small businesses that are critical for job creation.
Applications to the Finance Justice Fund from qualifying OFN member CDFIs will be accepted in December.
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