Establishing a Successful  
Native CDFI
First Nations Oweesta Corporation

National Summit on Emerging Tribal Economies


Who is First Nations Oweesta Corp. (FNOC)
First Nations Oweesta Corporation was launched by First Nations Development Institute to: 
enhance the capacity of Native tribes, communities and peoples to access, control, create, leverage, utilize and retain financial assets;
To provide access to appropriate financial capital for Native development efforts.

Native communities need Native community development financial institutions (NCDFIs) at the local and regional level to form capital and provide technical assistance for a variety of purposes including:
Business financing 
Home ownership & housing development
Land acquisition
Community Development projects

To assist tribes and Native communities FNOC can:
Assist in the development and/or expansion of reservation or Native community community development financial institutions;
Provide to qualified community development financial institutions loan/investment capital.
Through training and materials development enhance the capacity of Tribes, organizations and people to better manage their financial assets. (Financial Literacy)

How to reach us
Elsie Meeks  
Malinda Amiotte 
605.455.1700 phone
605.455.2110 fax
Emeeks@oweesta.org
PO Box 280
	Kyle, SD 57752

What is an CDFI?
Community 
Development
Financial 
Institution

Community Development
Mission must be Community Development
Low and Moderate Income People
Low and Moderate Income Communities
Lending sectors include: 
Housing
Business 
Community Services
Individual

Financial
Primary Activity of a CDFI is lending or investing
CDFIs develop financial products to meet the needs of their markets
Make loans that are riskier, often to unconventional borrowers
CDFIs also provide Development Services (aka Technical Assistance)
Institution
CDFIs strive to become a permanent capital resource in their communities
Not a "program" that comes and goes at the whims of the funders and others
Capital Access is part of long term solution to poverty alleviation
In order to be permanent we can't lose our capital - this means CDFIs expect to be repaid!
CDFIs can't avoid risk, but must learn to manage it
CDFI Role in Creating a Healthy Economy
CDFIs provide Capital & Technical Assistance to projects that help create a healthy economy

CDFIs leverage grants, bank loans and other sources of capital into the community

CDFIs build capacity of businesses, community members, and non-profits 

CDFI Role in Creating a Healthy Economy
Can be independent of (tribal) government.
Can help community address issues such as land acquisition and consolidation, savings, homeownership, business development.
Can provide home-ownership opportunities.

Borrowers benefit the community
Create businesses that provide needed products and services 
Provide jobs
Keeps dollars at home instead of flowing out to border towns.
Create needed childcare, healthcare, assisted living, and other social services

What can a CDFI do?
Can Do
Make Loans
Make loan decisions based on ability to repay
Get repaid so CDFI can make more loans 

Can't Do
Make Grants
Make loans based on political motives or family connections 
Lose the CDFI's capital through loan losses
Number and types of CDFIs
Estimate of 800 CDFI-like organizations in U.S.A.
553 CDFIs certified by the CDFI Fund as of Feb. 02

Sectors
Loan Funds
Credit Unions
Micro enterprise
Banks
Venture Capital

Examples of Native CDFIs
Examples include local and regional revolving loan funds, credit associations, credit unions such as:
The Lakota Fund (Pine Ridge)
Four Bands Community Fund (Cheyenne River)
Sisseton-Wahpeton Credit Union
Lac Courte Orielles Credit Union
Hopi Credit Association 
Valley Credit Association (Duck Valley)
ATNI Revolving Loan Fund (Northwestern Tribes)
Four Directions Development Corporation(Penobscot)
Oglala Sioux Tribe Partnership for Housing(Pine Ridge)
Navajo Partnership for Housing

Profiles of CDFI's
The Lakota Fund - Pine Ridge
Began as a project of FNDI in 1985.
Started as a micro-lender, now small business.
Has lent out nearly $2.6m to nearly 500 tribal members.
Has a loan capital fund of $3.5m from foundations, private investors, governmental sources.
Staff of twelve (nine lending staff).

Lakota Fund - con't
Provides small business training (10 week) 
Provides individual technical assistance & operates a TBIC
Constructed a 30-unit low-income tax credit housing project
Developed an IDA program.
Researching the development of a land acquisition loan fund 
CDFI certified.

Profile of TLF's borrowers
85% never had a checking or savings account
75% never had a loan
95% never been in business

Examples of business funded by TLF
Trucking
Construction
Video Store's
Buffalo Ranches
Electrical Services
Art & Crafts
Hair Salon
Tire Repair Shops
Cattle Ranch
Horse Ranching
Convenience Store
Reservation Tours Service
Trading Post
Bed & Breakfast
Grocery Stores


Tipi Retail
Farming
Bookkeeping/H&R Block
Computer Retail
Desktop Publishing
Fast Food Café
Food Concession Vendor
Honey Bee Services
Bakery
Automotive Shop
Clothing Consignment
Misc. Fix & Repair shop
Towing Services
Trailer House Park

Profiles - con't
Four Bands Community Fund - Cheyenne River
Started as a project of Tribes Economic Development Agency.
Has an independent board consisting of tribal members and bankers.
Will be a micro-lender in the beginning.
Provides business training.
Has made 7 loans ($1,000) 
Has obtained CDFI Certification and funding.
Funding from governmental and private foundations.


More Profiles 
Hopi Credit Association - Arizona
Has been in operation since 1952
Makes consumer, housing, and business loans.
Has made over $5m in loans.
Capital fund funded through Tribe, banks, private investors, governmental sources.
Is a certified CDFI.



How much capital does it take?
Depends on type of financial institution
Microenterprise funds - $50,000 - $300,000
Small business - $500,000 to $10mm
Land acquisition - ??? (at least $1mm)

Where?
Rural Development (USDA) (loans and grants)
Private investors (loans)
Foundations (loans and grants)
Banks (loans and grants)
SBA Microenterprise Program (loan)
CDFI FUND (Dept. of Treasury) (loans and grants)
NACTA

What about operating funds?
CDFI Fund
Foundations
Rural Development
Banks??
Tribal funding**

	**In a perfect world, a tribe would fund these organizations without strings attached.

Lessons Learned
Keep politics out of lending decisions.
Require training for borrowers
Good loan tracking system absolutely important.
Commitment to collections
Require investment from the borrower.
Be a model organization.
Responsible, disciplined, ethical staff/board
Develop good policies/adhere to policies
Develop good operating systems
Annual audits