The Mission Driven Bank Fund (MDBF) has made significant strides in its efforts to support minority-owned and community development banks, announcing a second close that has brought its total capital to over $177 million. This latest development marks a crucial step forward in addressing the racial wealth gap and fostering a more inclusive banking system across the United States.
The second close, which added $65 million to the fund, welcomed new limited partners including banks with assets ranging from $6 billion to over $150 billion. Among the notable participants in this round are Lake City Bank, Enterprise Bank & Trust, Hancock Whitney Bank, and Banner Bank. These institutions join a growing list of investors committed to supporting FDIC-insured Minority Depository Institutions (MDIs) and Community Development Financial Institution (CDFI) banks.
John M. Hairston, president and CEO of Hancock Whitney, emphasized the alignment of this investment with their institutional values, stating, ‘We believe investing in the MDBF aligns with our mission, purpose, and core values and supports working together to help people and businesses grow and protect their financial futures, which in turn supports strong economies, new opportunities, and enhanced quality of life for all people in the communities we serve.’
The significance of this fund lies in its targeted approach to addressing systemic inequalities in the financial sector. By providing capital and technical services to CDFIs and MDIs, the MDBF aims to strengthen these institutions’ ability to serve African American, Native American, Asian, Hispanic, and Pacific Islander communities. This focused strategy is designed to create a more robust and inclusive banking system that can effectively work towards closing the racial wealth gap.
Rickey Jimenez, director of community reinvestment with Enterprise Bank & Trust, highlighted the unique position of the MDBF in the impact investing landscape. ‘MDBF is in a unique position to assist a vital sector of the overall impact investing ecosystem. CDFI’s and MDI’s play an essential role in closing the lending gaps that individuals and small businesses experience,’ Jimenez remarked, underscoring the fund’s potential to address critical financial disparities.
Paul Welch, the Mission Driven Bank Fund portfolio manager, expressed optimism about the fund’s progress and future prospects. ‘We are pleased with progress toward achieving the Fund’s objectives and are encouraged by the robust investment pipeline. The Fund continues to engage with mission-aligned banks to create customized solutions to build capacity and serve their communities,’ Welch stated.
The MDBF’s approach goes beyond mere capital injection. By offering technical services alongside financial investment, the fund aims to enhance the operational capabilities and resilience of these mission-driven banks. This comprehensive strategy is designed to translate into tangible progress in reducing the racial wealth gap, a persistent issue in the American financial landscape.
As the fund continues to grow, with additional closings planned through May 2025, its impact on the banking sector and underserved communities is expected to expand. The involvement of diverse financial institutions as limited partners signals a growing recognition within the banking industry of the need to address financial inequities and support community-focused banking initiatives.
Interested parties can find more information about the Fund’s initial investors and portfolio at https://missiondrivenbankfund.org. The ongoing expansion of the MDBF represents a significant step towards creating a more equitable financial system, one that better serves all communities and works actively to close the racial wealth gap in the United States.
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