Community Investing

Posted in Finance, Accounting and Economics Terms, Total Reads: 700

Definition: Community Investing

Community investing is a type of investing which tries to channelize the flow of funds from public and private players to the low income groups of the society. It helps the underserved communities of the society to gain access to the capital and credit required for affordable housing, clothing and shelter. It provides them with the training or skillsets that they would otherwise lack to enhance their employability.

Although the span of area of investing is wide, few areas are:

• Services needed for education, child care, affordable housing, access to jobs etc.

• Economic development through job creation or infrastructure development

• Focus on sustainable development such as environment friendly investment

Credit unions, loan funds and Community development Banks are developed for the purpose of community investing. These options are available for all kinds of investors. Opportunities to invest in fixed income instruments as well as products offered by private equity players are also there. Through community investing individuals and organizations may help to improve the society. It also largely helps in small business development. A huge amount of development has taken place United States with the help of community investing. National Community Investment Fund (NCIF) was developed in 1996 in US to serve the same purpose. It is non-profit private equity fund established with a vision to reinvest institutional money in various minority owned organizations. Generally, community investing has an immediate impact on the region where it has been implemented. Venture funds are also a part of community investing.


Hence, this concludes the definition of Community Investing along with its overview.


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