MDIs are trusted providers for communities of color and include some of the oldest minority-owned US banks; they play a unique role in increasing access to financial services for underserved populations.
Today, Visa announced the launch of Visa Minority Depository Institutions Accelerate — a program to help reduce economic disparities and expand access and opportunity in communities of color across the United States. Through this multi-year program, Visa will invest up to $100 million via deposits with MDIs to help them catalyze lending. Visa will also provide tailored insights and digital solutions to these banks to help them meet the needs of their clientele and the communities they serve.
Economic and health shocks from the COVID-19 pandemic have severely affected minority households already suffering from longstanding disparities in wealth. Uplifting communities of color can have far-reaching benefits. According to a study by McKinsey and Co, closing the racial wealth gap could add up to $1.5 trillion to the US GDP by 2028.
MDIs are trusted providers for communities of color and include some of the oldest minority-owned US banks, as well as newer institutions working to reduce economic disparities. MDIs play a unique role in increasing access to financial services for underserved populations. According to the FDIC, they originate a substantially higher proportion of mortgages and small business loans to minority borrowers than other financial institutions do.
“Visa acknowledges that economic disparities must be addressed through equitable access to financial resources. We want to do our part by working with MDIs and other associations tied to diverse communities.” said Michelle Gethers-Clark, chief diversity officer & head of corporate responsibility at Visa. “We believe MDIs play a critical role in improving economic outcomes and are proud that Visa MDI Accelerate will advance our shared goal of uplifting everyone, everywhere.”
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Visa’s MDI Accelerate program joins a growing number of efforts by US financial institutions to help level the playing field for BIPOC and other underrepresented communities around the country. In 2020, Visa committed to digitally enable 50 million small businesses across the US, with $100K in grants earmarked for Black-women-owned small businesses; while Mastercard deployed $20 million through impact investment platform CNote to provide funding for underserved communities and help women- and minority-owned businesses across the US recover and grow. And earlier this month, Umpqua Bank launched a $2 million program that aims to close the opportunity gap in access to capital, resources, and expertise for minority and women entrepreneurs.
Visa’s new Accelerate program will help MDIs in three areas important to their mission:
Catalyze lending, by investing up to $100 million via deposits with MDIs.
Deliver tailored insights to MDIs, by providing first-in-the-country access to new enhancements to Visa’s Spending Momentum Index to provide aggregated insights on consumer spending — illuminating the economic health of communities. In addition, Visa will support the development of the National Bankers Community Alliance’s digital impact measurement platform that enables MDIs to quantitively capture how they support their communities, helping MDIs attract new investment.
Equip MDI customers with digital tools and training, via a suite of small business payment tools on Authorize.net and digital learning platforms to equip small business owners and consumers with the financial skills, insights and tools to manage their financial lives.
“Creating more equitable wealth distribution requires more inclusive opportunities for MDIs to uplift the communities they serve,” says Nicole Elam, executive director of the National Bankers Community Alliance — the nonprofit affiliate of the National Bankers Association. “We are pleased this multi-faceted program will enhance the lending capacity of MDIs as well as empower minority-owned and -operated banks with social and economic impact data to better serve their customers and communities.”
Visa will work closely with FDIC-designated MDIs to determine interest in participating in the Accelerate program — which Visa says will better equip them to serve their clientele and communities through increased financing, enhanced digital capabilities, and better insights and analysis.
For more information, visit Visa.com/MDIAccelerate.