Inclusiv Launches $20 Million Secondary Capital Fund

Inclusiv said Thursday that it launched a $20 million Racial Equity and Resilience Investment Fund that deploys secondary capital to expand economic relief and financial inclusion for credit unions that serve communities of color.

The $116 million River City Federal Credit Union has received the first secondary capital loan from this new fund, according to Inclusiv, a New York-based organization committed to helping low- and moderate-income people and communities achieve financial independence through credit unions.

The secondary capital loan will support the San Antonio-based credit union’s expansion of its banking and lending to Latinx and immigrant communities.

Although it is one of the fastest growing cities in the Lone Star State, San Antonio also has high concentrations of predatory financial firms that target financially vulnerable consumers, especially newly arrived immigrants.

As a CDFI, MDI and Juntos Avanzamos designated credit union, the 11,873-member River City FCU has worked with community partners in designing a suite of products for the unbanked and credit invisible.

“Working with community partners including the Mexican Consulate and the YWCA, we designed a suite of products designed for those who haven’t had accounts in the past and have yet to build credit,” Jeff Ivey, president/CEO of River City FCU, said. “These deposit and loan products are designed to bring people into the credit union, save them money by not paying excessive fees or interest, and begin to establish financial stability. Breaking generational poverty can start with finding a financial institution willing to take the time and effort to help you understand how things work. We see that as a major responsibility.”

This new secondary capital loan fund will build on Inclusiv’s Resilience Grant Fund introduced in June 2020, which has raised more than $1 million in grant funds for 59 minority designated credit unions around the country. These funds are supporting credit unions to provide emergency relief loans, expand their outreach to minority businesses, get connected with capital, and reach unbanked and underbanked consumers with access to responsible financial services.

According to an analysis by Inclusiv, the impact of secondary capital investments found that credit unions leverage this capital 60 times over five years by increasing loan deployment, the number of product lines and the volume of specialized lending.

“Community development credit unions have been on the front lines working to secure financial security for their members and communities. Minority credit unions are frequently the sole source of responsible capital in communities of color,” Inclusiv CEO Cathie Mahon said. “Investments in this network of institutions has immediate and real impact. This capital will increase access for low-income households, ensure that stimulus relief is distributed equitably, and respond to the unprecedented level of economic shock caused by COVID-related shutdowns.”

The Inclusiv Racial Equity and Resilience Fund is made possible through support from the Robert Wood Johnson Foundation.