LIHU‘E — The Kaua‘i Government Employees Federal Credit Union is the recipient of $1.8 million in COVID-19-relief funds released by the U.S. Department of the Treasury last week.
The amount is part of a national award of $1.25 billion to 863 community development financial institutions, a designation earned by KGEFCU in December 2020, states a press release from KGEFCU.
“These funds build our capacity to better serve borrowers who are traditionally not able to access capital,” said KGEFCU CEO and President Monica Belz.
“By growing a more-equitable system of capital, we empower our local business community, create meaningful jobs and ensure local talent can flourish. This is our commitment to resilience and recovery on Kaua‘i.”
The announcement of the awards was done at the White House by Vice President Kamala Harris with Treasury Secretary Janet L. Yellen, where more than 860 CDFIs, including 244 credit unions, earned grants that provide vital funding to underserved communities.
The grants will be done through the Treasury’s CDFA Rapid Response Program, and will provide the necessary capital for CDFIs to respond to economic challenges created by the pandemic.
“In serving places that the financial sector historically hasn’t served well, CDFIs lift our whole economy,” said Yellen.
”We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment,” she said. “The president and the vice president ran on a very ambitious agenda — ‘Build Back Better,’ unwinding systemic racism, creating an economy that works for everyone. I believe this is what that looks like in practice. By channeling more capital into CDFIs, we are translating those ideas into reality.”
DFI RRP grant funds will be used to support eligible activities such as financial products, financial services, development services and certain operational activities, and to enable CDFIs to build capital reserves and loan-loss reserves.
The award recipients include 58 organizations receiving a total of $54.6 million in awards that committed to direct their awards to investments in Native American, Native Alaskan and Native Hawaiian communities.
A CDFI can be a bank, credit union, loan fund or venture-capital fund. The CDFI approach represents a thriving model of public-private partnership where limited federal resources are used to attract private-sector investment into low-income communities. KGEFCU is one of nine CDFIs in the state to get this award, and the only CDFI on Kaua‘i to be awarded RRP funds.
KGEFCU, following a name change in 1990, was originally established as the Kaua‘i T &C Federal Credit Union in 1947 as a credit union for employees of the Territory of Hawai‘i and County of Kaua‘i to assist families with basic financial needs, and to invest in and grow the quality of life on the island.
Since its creation in 1994, the CDFI Fund has awarded more than $3.9 billion to CDFIs, community-development organizations and financial institutions.
In addition, the CDFI Fund has allocated $61 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program and closed guaranteed bonds for over $1.7 billion through the CDFI Bond Guarantee Program. For more information about the CDFI Fund and its programs, visit cdfifund.gov.
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Dennis Fujimoto, staff writer and photographer, can be reached at 245-0453 or dfujimoto@thegardenisland.com.
Source: The Garden Island
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