The Big Get Bigger?

Growth Trends in the CDFI Industry, 2019-2021

Since mid-2020, Aeris has issued quarterly CDFI loan funds trends reports tracking the industry’s performance during the Covid pandemic. Readers will recall that our analyses over the past six quarters generally found that CDFIs yet again proved themselves to be resilient economic first responders, as they stepped up to confront dual economic and social crises faced by communities: namely, the economic fallout from the pandemic and entrenched racial inequality. As previously reported, over the past two years CDFIs not only survived, but in many cases thrived, as they attracted unprecedented resources and recognition of their role in reaching and supporting underserved communities and populations.

With our yearend 2021 trends report, we are focusing more on the question: what does our data tell us about CDFI growth during the nearly two years of operations under the pandemic?

Larger CDFIs are Pulling Away from the Pack

With the arrival of yearend data in the Aeris® Cloud we can now examine nearly two full years of performance during the Covid pandemic.

Across all three sectors that Aeris monitors¹, larger CDFIs are separating themselves from their peers in terms of Total Assets growth. As illustrated in the Total Assets figures² below, this trend seemed to accelerate post-2019 among Business/Micro (Figure 1) and Housing Development Lenders (Figure 2).

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The acceleration of growth in the top and median quartiles since 2019 for these two sectors can be partially explained by two factors: (i) Paycheck Protection Program (PPP) lending, which some of the larger CDFIs were able to offer at significant scale; and (ii) extraordinary contribution levels, as many government entities, foundations, corporations, and philanthropists directed new resources to CDFIs to help small businesses and nonprofits weather the crisis. The “discovery” of CDFIs by new supporters resulted in increased grant revenues, which gave CDFIs the resources necessary to provide capital and technical assistance to their borrowers, as well as to strengthen their own balance sheets to buffer against the increased risk within their loan portfolios.

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The top quartile dip in Total Assets at yearend 2021, especially for Business and Micro Lenders, is also related to the PPP. As PPP loans are processed and forgiven by the Small Business Administration, CDFIs are repaying related debt and decreasing Total Assets. This trend may continue for the next two to three quarters as PPP loan forgiveness continues to be processed. Regardless, the gap between the top quartile and median will likely not return to pre-2019 levels.

Unlike the separation rate of the top quartiles of the prior two CDFI lending cohorts, the rate of Community Facilities and Commercial Real Estate Lenders did not notably change post-2019, but instead continued the previous trend, which dates back at least to 2014, as shown in Figure 3.

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To further illustrate the challenge of smaller CDFIs “catching up” to their larger peers, we present Figure 4, which shows average annual change in Total Assets by primary lending sector for the top and bottom quartiles over the last five years. While the bottom quartile grew faster in 2019-2021 than in prior years, it did not narrow the gap with the top quartile.

Other Growth Performance Metrics

In addition to Total Assets, we analyzed other growth performance metrics to provide a more robust perspective of CDFI growth. CDFIs in the top, second, third, and bottom quartiles for Total Assets mostly fall into corresponding quartiles related to Loan Portfolio growth. However, those CDFIs with significant off-balance-sheet assets under management—and consequently higher earnings—fell into a higher Earned Revenue quartile compared to their quartile for Total Assets. Contributed Revenue quartiles correspond the least because they are driven by multiple factors unrelated to CDFI size. Nonetheless, overall, there is significant overlap in quartile distributions amongst these key metrics.


Most will agree that for the CDFI field to systemically address societal injustice and poverty everywhere, CDFIs across the industry must continue to grow and reach scale. The data presented in this report underscore the challenge for small CDFIs growing and reaching scale. While we did not analyze CDFI growth patterns beyond grouping by lending type—for instance, by geography (rural vs. urban), management diversity, or age of organization—it has been observed that entrenched and systemic disparities often hamper access to capital. It is paramount that CDFI funders, investors and policy makers keep these disparities in mind.

We look forward to your feedback on this post and invite your questions and ideas for future topics for our quarterly CDFI loan funds trends report. We will continue to monitor overall CDFI portfolio quality, lending activity, and growth in the coming quarters and will report in this space on any noteworthy developments that will be of interest to lenders and investors in loan funds and to loan funds themselves. Subscriptions are available to the Aeris database for those who wish to perform their own analysis, and new functionality in the Aeris Cloud will be completed in the second half of 2022, which will enable even more robust industry analysis than previously possible.

This is the seventh in a series of CDFI trend reports tracking CDFI performance during the Covid pandemic. Reports for Q3 2021, Q2 2021, Q1 2021, Q4 2020, Q3 2020, and Q2 2020 are also available.

¹ Aeris organizes CDFIs into peer groups based on primary lending types. Most CDFIs fall into one of the following three types: (1) Business and Micro Lenders, (2) Housing Development Lenders, and (3) Community Facilities and Commercial Real Estate Lenders.

² An increase or decrease in the number of CDFIs reporting may cause the trend lines to change, independent of changes in performance. For CDFIs that only reported fiscal-year-end data, that data is used as a proxy for the following three quarters.

Are you an investor with questions about the performance of your own CDFI portfolio? We are eager to hear from you. Contact us if you would like to discuss your portfolio, ask questions, or hear more about what we are seeing through our CDFI ratings and data collection work. Are you a CDFI loan fund that would like to participate in our database? Let us know.

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