Randall Akee: More support needed for lending in Indian Country

From a policy perspective, the research indicates the importance of existing Community Development Finance Institutions (CDFI) which tend to work within American Indian and other Indigenous peoples’ communities. These organizations are often operated by American Indian organizations; the CDFIs fill a role that is often unmet by commercial banks or lending institutions. These organizations provide a means for those residing on reservations that face several economic and financial obstacles to borrowing to gain credit and borrowing experience. In the US today there are over 68 CDFIs serving Native American communities that have average loan sizes below $30,000 suggesting that these institutions are serving the lowest end of borrowers. Additionally, there are over 18 Native-owned banks in the US. If discrimination persists in borrowing and lending, these institutions may play an important role in remedying this problem for Native Americans seeking credit.

Tribal governments have already undertaken direct lending and loan guarantee programs themselves that serve their tribal citizens. These programs are important in helping reservation residents establish credit as well as providing access to credit. Coupled with training programs in financial literacy (as those offered by Oweesta Corporation) these opportunities should improve the credit history and credit scores of those residing on reservations. Tribal leaders and policy makers interested in expanding opportunities for Native American asset creation would do well to increase their support for Native CDFIs and training opportunities.