Puerto Rico credit unions get $6.9M grant to expand community response
The US Department of the Treasury has granted a $6.9 million grant to 45 Puerto Rico credit unions through the Community Development Financial Institutions Fund (CDFI) to continue to strengthen their capacity to respond to economic and community development needs.
The allocation is split between $4.7 million for technical assistance grants, which will be distributed at a rate of $125,000 among 38 credit unions; and $2.2 million to nine credit uions under the Small Dollar Loan program, said René Vargas, director of the Inclusiv network in Puerto Rico.
The Small Dollar Loan aims to expand the capacity of institutions to issue small loans to people who do not have access to traditional banking.
Both allocations are aimed at financial institutions acquiring new technologies, expanding their financial capacity, developing new products and, in turn, supporting the recovery efforts of communities, including small and medium-sized businesses, Vargas explained.
“The multi-million-dollar allocations reflect the financial strength of Puerto Rican credit unions, their competitiveness, and their role during recent emergencies,” he said.
This is the fourth consecutive year that credit unions receive an economic boost to increase their financial capacities, he said.
“These resources from the US Treasury, at a time when Puerto Rico is going through another emergency, represent a validation of the community work done by the credit unions, their compliance at the federal level and economic growth,” he said.
Hurricane Fiona has “demonstrated the importance of having the physical and technological resources to continue offering financial services to communities and businesses even in difficult conditions,” said Aurelio Arroyo, president of the Cooperativa de Ahorro y Crédito Jesús Obrero and member of the Inclusiv Board.
“Most of the credit unions reopened their doors the day after Hurricane Fiona, using alternative energy sources and demonstrating their commitment to Puerto Rico, as they did after Hurricane María,” said Arroyo.
In October 2021, the US Treasury granted $5.5 million in technical assistance through the CDFI to 44 local credit unions, which served both for the development of financial and technological products, as well as for community projects such as training for the management digital banking, scholarships, home financing and others.
“These allocations will allow credit unions to identify innovative solutions to help our communities affected by Hurricane Fiona by developing affordable financial products such as personal loans, emergency loans, green energy loans and other services not offered by traditional banking,” said Dahlia Torres, executive director of the Puerto Rico Association of Credit Union Executives.