From The Star Team
In a pivotal initiative to enhance the lending capabilities of credit unions and tackle the growing demand for economic and community development in Puerto Rico, the federal Treasury Department has unveiled a grant allocation totaling $10.2 million.
This funding is designated for eight savings and credit unions and one local federal credit union, facilitated via the Community Development Financial Institutions Fund (CDFI Fund).
According to René Vargas Martínez, vice president for Puerto Rico and the Virgin Islands at Inclusiv, the competitive funding recipients include the Dr. Manuel Zeno Gandía Savings and Credit Cooperative in Arecibo, receiving $1.3 million, and La Puertorriqueña Savings and Credit Cooperative in San Juan, also awarded $1.3 million.
Similarly, the Savings and Credit Cooperative of Caguas, Savings and Credit Cooperative of Isabela, Savings and Credit Cooperative of Lares and Central Region, Savings and Credit Cooperative of Manatí, Savings and Credit Cooperative of Valenciano in Juncos, and VAPR Federal Credit Union in Guaynabo each received $1.1 million. The Savings and Credit Cooperative of Lomas Verdes in Bayamón was granted $1 million.
With this allocation, the total U.S. Treasury investment in Puerto Rico’s cooperative system over the past six years has reached nearly $322 million. The funding has enabled cooperatives to design new financial products and provide online services, including mobile banking, check deposits, and loan applications.
Vargas Martínez emphasized that this new funding signifies the crucial role of cooperatives as drivers of economic and community advancement on the island. He remarked that this recognition should inspire pride and active participation among stakeholders.
“Cooperatives remain essential contributors to the economic growth of Puerto Rico, and this investment offers a chance to further amplify their influence in the communities they support,” Vargas Martínez stated. “With these funds, they will be able to broaden their range of personal loans, mortgages, small business financing, and accessible green loans. We reaffirm our dedication to removing obstacles for cooperatives to access the same public and private sector funding sources as institutions outside the island, thereby aiding Puerto Rico’s economic advancement.”
Financial Assistance (FA) grants are awarded competitively and take the form of grants, capital investments, deposits, and shares in community development financial institutions.
Vargas Martínez pointed out that in this instance, cooperatives are required to provide a matching contribution for the federal funds received, which effectively amplifies the investment’s impact in fulfilling the demand for accessible financial products in low- and moderate-income areas.
“FA funds are utilized to expand services into new regions, reach new demographics, introduce new offerings, and increase the scale of financial services,” he explained. “This backing has fostered the creation and growth of businesses, job opportunities, affordable housing developments, and enhanced home financing, thereby strengthening communities at both local and national levels.”
Mabel Jiménez Miranda, executive president of the Corporation for the Cooperatives Supervision and Insurance Corp., highlighted that the fresh investment is a tremendous development that confirms the vigor of the cooperative sector and its capacity to adhere to the highest regulatory standards while remaining key stakeholders in the island’s economic progression.
“From our regulatory standpoint, it is uplifting to observe the Puerto Rico cooperative system achieving remarkable outcomes, supported by an investment exceeding $312 million in CDFI funds,” she noted. “Between 2018 and June 2024, we’ve seen consistent growth in critical sectors: membership has surged by 16%, assets have risen by 36%, and the loan portfolio has expanded by 53%. The 147% increase in mortgage loan originations and 80% in commercial loans clearly illustrate that cooperatives are responsibly leveraging their resources. Furthermore, the astounding 1,198% growth in investments in green initiatives underscores their commitment to sustainability. These statistics not only reflect the effective financial management of cooperatives and their adaptability but also signify positive news for Puerto Rico’s economic outlook.”
