Financing Low-Income Communities: Models, Obstacles, and Future Directions

by Julia Sass Rubin

Overview

Access to capital and financial services is crucial for healthy communities.  However, many impoverished individuals and neighborhoods are routinely ignored by mainstream financial institutions.  This neglect led to the creation of community development financial institutions (CDFIs), which provide low-income communities with financial services and act as a conduit to conventional financial organizations and capital markets. Edited by Julia Sass Rubin, Financing Low-Income Communities brings together leading experts in the field to assess what we know about the challenges of bringing financial services and capital to poor communities, map out future lines of research, and propose policy reforms to make these efforts more effective.

The contributors to Financing Low-Income Communities distill research on key topics related to community development finance. Daniel Schneider and Peter Tufano examine the obstacles that make saving and asset accumulation difficult for low-income households—such as the fact that tens of millions of low-income and minority adults don’t have a bank account—and consider solutions, like making it easier for low-wage workers to enroll in 401(K) plans. Jeanne Hogarth, Jane Kolodinksy, and Marianne Hilgert review evidence showing that community-based financial education programs can be effective in changing families’ saving and budgeting patterns.  Lisa Servon proposes strategies for addressing the challenges facing the microenterprise field in the United States.  Julia Sass Rubin discusses ways community loan and venture capital funds have adapted in response to the decreased availability of funding, and considers potential sources of new capital, such as state governments and public pension funds.  Marva Williams explores the evolution and recent performance of community development banks and credit unions.  Kathleen Engel and Patricia McCoy document the proliferation of predatory lenders, who market loans at onerous interest rates to financially vulnerable families and the devastating effects of such lending on communities—from increased crime to falling home values and lower tax revenues. Rachel Bratt reviews the policies and programs used to make rental and owned housing financially accessible.  Rob Hollister proposes a framework for evaluating the contributions of community development financial institutions.

Despite the many accomplishments of CDFIs over the last four decades, changing political and economic conditions make it imperative that they adapt in order to survive.  Financing Low-Income Communities charts out new directions for public and private organizations which aim to end the financial exclusion of marginalized neighborhoods.

Product Details

ISBN-13:	9780871547118
Publisher:	Russell Sage Foundation
Publication date:	11/28/2007
Edition description:	New Edition
Pages:	340
Product dimensions:	6.00(w) x 9.00(h) x 1.20(d)

About the Author

JULIA SASS RUBIN is assistant professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

CONTRIBUTORS: Julia Sass Rubin, Rachel G. Bratt, Kathleen C. Engel, Marianne A. Hilgert, Jeanne M. Hogarth, Robinson Hollister, Jane Kolodinsky, Patricia A. McCoy, Daniel Schneider, Lisa Servon, Peter Tufano, and Marva E. Williams.

Table of Contents

Acknowledgements Contributors Chapter 1 Introduction Julia S. Rubin SECTION I CREATING PERSONAL ASSETS Chapter 2 New Savings from Old Innovations: Asset Building for the Less Affluent Daniel Schneider and Peter Tufano Chapter 3 Financial Education and Community Economic Development Jeanne M. Hogarth, Jane Kolodinsky and Marianne Hilgert Chapter 4 Making US Microenterprise Work: Recommendations for Policy Makers and the Field Lisa J. Servon SECTION II BUILDING INSTITUTIONS Chapter 5 Financing Organizations with Debt and Equity: The Role of Community Development Loan and Venture Capital Funds Julia Sass Rubin Chapter 6 The Un-banks: The Community Development Role of Alternative Depository Institutions Marva E. Williams Chapter 7 Financing Production of Low and Moderate-Income Housing Rachel G. Bratt Chapter 8 Predatory Lending and Community Development at Loggerheads Kathleen C. Engel and Patricia A. McCoy SECTION III EVALUATING PROGRESS Chapter 9 Measuring the Impact of Community Development Financial Institutions' Activities Robinson Hollister