NEW YORK - First Nations Oweesta Corp. has applied to the U.S. Treasury to become an intermediary community development financial institution (CDFI) and hopes to channel capital to smaller loan funds in Indian country.
First Nations Oweesta, Vancouver, Wash., an affiliate of First Nations Development Institute of Fredericksburg, Va., has applied to the federal government's CDFI Fund for a $1 million grant which it will match with $1 million it is in the process of raising. It then plans to lend that money to other Indian country loan funds in a kind of wholesale conduit.
Executive director Patrick Borunda, Mescalero Apache and Tarahumara, said there are only a handful of Indian country CDFIs, such as the Lakota Fund in Kyle, SD. He hopes that number will grow "exponentially," and says some 30 funds are in the process of getting started.
Two that he said are fairly far along are the Char Koosta Fund on the Flathead Reservation in Montana, and the Four Bands Revolving Loan Fund on the Cheyenne River Sioux Tribe reservation in South Dakota.
He said he hopes the network of funds linked by First Nations Oweesta will spread best practices around Indian country and will lend in a respectful and culturally appropriate manner.
"The basics of sound lending are the same across Indian country," he said, adding a key to successful lending will be access to local technical assistance.
Operating capital for his group has come from banks. Loan capital will come from various foundations, while equity will come from grants.
First Nations Oweesta is trying to keep its cost of funds in the 2 percent to 2.5 percent range.
Borunda said his firm has assembled a premier team which includes as associate director of financial operations Shelly Haack, the architect of the Rural Community Assistance Corp. of Sacramento, Calif. Haack has 22 years of lending experience. She took a $1 million fund to $43 million in eight years, leveraging $280 million in affordable housing and community development infrastructure, he said.
The group's associate director of training and development is Natasha Shulman, a former Bank of America vice president. Shulman was in charge of the Seafirst Bank's Native American program.
First Nations will hold its 11th annual Oweesta conference in Washington, D.C., August 12 through 15. Tracks include community economics, housing, reservation economic vehicles and information technology.
In addition, there will be three pre-conference workshops Aug. 11 on geographic information systems, community food security and leadership through negotiation.