Four credit unions this week received the first Community Development Financial Institutions Fund (CDFI) grants from the U.S. Department Treasury, to continue promoting service projects in their communities and develop their institutions.
The grants allocated to BoniCoop, JayuCoop, GuraCoop and Jesús Obrero totaled $125,000 and represent a “recognition of the critical role that these institutions play in their communities,” the Association of Credit Union Executives stated.
The funds open the door for Puerto Rico’s co-op movement so they can apply for federal grants, as well as funding from foundations and private institutions, Jose Julián Ramírez, executive director of the Association said.
Channeling these first federal grants is a milestone because it “validates the ability of credit unions to act as engines for economic revitalization of communities and positions these institutions to access additional resources, both public and private, said Pablo DeFilippi, senior vice president of the National Federation of Community Development Credit Unions.
After Hurricane María last year, the Association signed a collaboration agreement with National Federation of Community Development Credit Unions to offer training to more than a dozen cooperatives interested in becoming certified.
When a credit union is certified, it is qualified to apply for financial assistance from the CDFI Fund for projects that impact communities, for capital injection to lend to individuals or small businesses at lower interest, or to use as a reserve. This financial assistance could be up to $1 million, the executives said.
“With this funding we will invest in technology to make our services more accessible to partners and customers, plus it will help us prepare for the CDFI Fund certification,” said Carlos Ortiz, CEO of Boni Coop in Aibonito and chairman of the Association’s CDFI committee.
In addition to investing in technology, the CEO of JayuCoop credit union, Luis Daniel Rodríguez, said the institution will use the financial support for its disaster recovery plan. The credit unions have two years to use the funding and complete the certification process.
“The contribution of these funds is a validation of the community work we have been doing,” said Aurelio Arroyo, president of the Jesús Obrero credit union in Caguas.
“It means making it possible to reach communities and our interest is that it is used for the creation of a of financial planning program and the development of financial products for disadvantaged areas, especially those most affected by the disaster,” said Arroyo.
At least 10 other credit unions will likely apply for technical assistance, Ramírez said.