This spring, California Capital hosted a fellowship with the UC Berkeley Goldman School for Public Policy, in partnership with the National Community Reinvestment Coalition (NCRC). The support of these two institutions made this valuable project possible.
Originally chartered in 1982 as a Financial Development Corporation (FDC), California Capital FDC is a small and emerging Community Development Financial Institution (CDFI) in Sacramento, California. Our historic mission is to provide access to capital and capacity-building services to diverse low-to-moderate income communities. Our objectives as a CDFI are to provide fair financing at below-market rate for our borrowers, supported by capacity-building technical assistance, resources, and opportunities for revenue growth and wealth generation.
As host to a SBDC, WBC, and APEX Accelerator, we serve a diverse range of businesses, and in 2019 we launched a loan fund targeted to provide economic assistance to socioeconomically disadvantaged individuals and very small businesses who cannot access capital through traditional financial institutions.
As a member of the California CDFI Racial Justice Coalition, we adopted a Racial Equity Lens (REL) underwriting framework in 2022. The REL framework was developed through four CDFIs and the coalition as an experiment in reframing underwriting through an asset-based approach; and at California Capital, we created a risk matrix to track and expand our credit evaluations.
As a part of our commitment to ensuring that we serve BIPOC communities effectively, we have expanded capital and we strive to evaluate and improve on our REL lending practices. Recognizing the necessity of strengthening the REL program to better meet the needs of our target markets, this fellowship gave us the opportunity to undertake a thoughtful review and adjustment of our underwriting criteria. We are especially thankful to Mr. Ngarangi Joseph Haerewa for his time working with us to produce this report and for his insightful recommendations. We hope to share this report as it may help other mission-based lenders assess how they can expand capital to BIPOC communities. Click Here to view the report.
It is imperative that we not only set high standards for equitable investment but also actively work to exceed those goals. We commissioned this study to analyze the outcomes of our original REL strategy, understand the outcomes, and make data-driven decisions on developing new and innovative approaches to making strong loans to BIPOC entrepreneurs. To this end, we are committed to implementing recommendations and revisiting this assessment process in 2 years with a larger dataset, allowing us to measure our progress and evaluate our strategies accordingly. This continuous improvement is critical to ensuring that our lending programs effectively serve all members of our community.
