Inclusiv Provides Capital to Puerto Rican Cooperativa
With its investment in Jesús Obrero, Inclusiv becomes the first U.S. investor to target the island’s financial cooperative system.
Certified Community Development Financial Institution (CDFI) intermediary Inclusiv has become the first U.S.-based investor to support Puerto Rican cooperativas, according to a Monday announcement. The New York, N.Y.-based organization, in partnership with Deutsche Bank Americas Foundation, completed its first capital deployment on Dec. 16, 2022 into Cooperativa de Ahorro y Credito Jesús Obrero.
Inclusiv said the initial investment, totaling $1 million, was made possible by a Program-Related Investment (PRI) loan under Deutsche Bank Americas Foundation’s New Initiatives Fund. The Fund, created in 1997 by Deutsche Bank, “provides flexible financing that serves the needs of the poor and disadvantaged communities within the United States and throughout the developing world,” according to Deutsche Bank USA’s website.
Based in Guaynabo, Puerto Rico, Jesús Obrero is a U.S. Treasury-certified CDFI and part of Puerto Rico’s cooperativa (financial cooperative) system – the third-largest financial conglomerate on the island that serves more than 1.2 million member-owners in 75 of Puerto Rico’s 78 municipalities.
The investment will help support the cooperativa’s financial growth, as well as its initiatives that promote financial inclusion in underserved communities and solar energy resiliency. One of these initiatives is Guaynabo’s Rural Solar Energy Resilience Project, which the cooperativa launched to provide funding for clean and renewable energy projects in rural communities in Guaynabo.
“Deutsche Bank Americas Foundation is proud to support Inclusiv and cooperativas on this historic investment,” Cheryl Gladstone, head of Deutsche Bank’s Community Development Finance Group, stated. “Community-led and community-centered financial institutions, such as Puerto Rican cooperativas, have been at the forefront of disaster recovery and resiliency efforts. This initial capital deployment will expand Jesús Obrero’s initiatives in advancing community-led climate resiliency and equitable financial services, as well as catalyze other investors into the space to spur more funding for the impactful work cooperativas do in Puerto Rico.”
Inclusiv President/CEO Cathie Mahon added, “Inclusiv is grateful for the support of Deutsche Bank Americas Foundation in becoming the first U.S.-based investor in Puerto Rican financial cooperatives. Capital fuels the growth and impact of credit unions and cooperativas to meet the demand for safe and responsible financial services. This is a groundbreaking moment!”
Aurelio Arroyo González, the CEO of Jesús Obrero, noted that the cooperativa is the first CDFI cooperative on the island to receive a PRI loan from a world-class international bank, and that it will help Jesús Obrero offer financial products and services to low- and moderate-income communities. “A long road of due diligence, analysis and validation of the soundness of our institution, coupled with an excellent perspective for the Puerto Rican cooperative movement, gave way to this historic investment,” he said, adding, “This demonstrates that cooperativas are an ideal conduit to channel and deploy responsible investments for the benefit of the communities we serve.”
According to Inclusiv Capital Director Cathi Kim, the goal of the initial investment is for it to serve as a proof of concept, and that Inclusiv’s vision is to attract other impact aligned partners to invest in the opportunities to advance community-led financial inclusion and climate resiliency in Puerto Rico.
“Inclusiv’s work as a CDFI intermediary and the national association for community development credit unions and cooperativas is to build out the larger ecosystem and connect resources to strengthen vibrant communities of opportunities, resiliency and economic inclusion,” Kim said. “In the upcoming year, we will continue to advocate for the inclusion of community development credit unions, cooperativas and community-led solutions in advancing an inclusive recovery and initiatives such as the Greenhouse Gas Reduction Fund.”
Kim also said that to date, Inclusiv has channeled more than $69 million in CDFI funding to Puerto Rican cooperativas, and that going forward, the organization will focus on deploying the committed funds from Deutsche Bank Americas Foundation, as well as look to connect with other investors and partners interested in investing in community-centered financial inclusion and climate resiliency initiatives.