Opportunity finance refers to

socially responsible investing Socially responsible investing (SRI), social investment, sustainable socially conscious, "green" or ethical investing, is any investment strategy which seeks to consider both financial return and social/environmental good to bring about social ...

by an institution in an organization or group of individuals.

Usage of the term

The

Opportunity Finance Network Opportunity may refer to: Places * Opportunity, Montana, an unincorporated community, United States * Opportunity, Nebraska, an unincorporated community, United States * Opportunity, Washington, a former census-designated place, United States * 39 ...

, a Philadelphia-based national umbrella group of 213

community development financial institution A community development financial institution (US) or community development finance institution (UK) - abbreviated in both cases to CDFI - is a financial institution that provides credit and financial services to underserved markets and populations, ...

(CDFIs) founded in 1995, defines the term as "a category of financing that helps people and communities just outside the margins of conventional, mainstream finance join the economic mainstream—and helps the economic mainstream enter emerging opportunity markets." It is closely related to

microfinance Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...

, but tends to occur on a larger scale and be more explicitly concerned with social benefit. The concept of opportunity finance has gained increased traction in recent years, both from political movements and economic necessity. The current economic climate in the United States has raised the demand for

creative financing Creative may refer to: *Creativity, phenomenon whereby something new and valuable is created * "Creative" (song), a 2008 song by Leon Jackson * Creative class, a proposed socioeconomic class * Creative destruction, an economic term * Creative dir ...

even for established businesses, as traditional bank loans for nonprofits and small businesses became harder to come by after the market crashed in the autumn of 2008. Although the concept of opportunity finance is applicable worldwide, the entrepreneurial connotations of the term make it most commonly applied to initiatives within the United States. The Opportunity Finance Network, itself a U.S. organization, connects the concept to individualism and "the bedrock of U.S. policy."

Opportunity finance and CDFIs

Community Development Financial Institutions A community is a social unit (a group of living things) with commonality such as place, norms, religion, values, customs, or identity. Communities may share a sense of place situated in a given geographical area (e.g. a country, village, town ...

(CDFIs) are nongovernmental financing entities (such as banks and loan funds) with the primary mission of community development, serving a target market, providing development services, and remaining accountable to their communities. CDFIs may be the most well-known practitioners of opportunity finance in the United States, because they comprise a group of government-accredited institutions. Some awards for opportunity finance are available to CDFIs only.Wachovia NEXT Awards for Opportunity Finance
description, accessed 4/20/2009 While there are numerous organizations certified as CDFIs by th
CDFI Fund
it is believed that there are thousands of financial institutions serving the needs of low-income people or communities in the U.S., but either have not applied for CDFI status or have otherwise not been able to fulfill all of the requirements for formal CDFI certification. All of these organizations can be said to be engaged in opportunity finance, despite their lack of U.S. governmental recognition.

Examples of opportunity finance organizations

Europe

Actis Capital Actis is a global investment firm focused on the private equity, energy, infrastructure, and real estate asset classes. Actis is a signatory to the United Nations Principles for Responsible Investment (UNPRI), an investor initiative developed b ...

United States

Accion USA The Accion U.S. Network is an American nonprofit microfinance organization headquartered in New York, NY. It is the largest and only nationwide nonprofit microfinance network in the U.S. About The Accion U.S. Network is part of Accion Interna ...

* Community loan funds, such as: ** Chicago Community Loan Fund *

Grassroots Business Fund The Grassroots Business Fund is a non-profit organization based in Washington, DC. It has field offices in Kenya, Peru, and India. Their mission is to build and support high-impact enterprises that provide sustainable economic opportunities to tho ...

Worldwide

* Heifer International>

External links

Opportunity Finance Network
website
CDFI Fund

Wells Fargo NEXT Awards for Opportunity Finance

Financial Times Sustainable Banking Awards

"Money for SBA initiatives may loosen credit for small firms to grow,"
Chicago Tribune, March 23, 2009

References

{{Reflist Social economy Community development