Financial Literacy Month: How CDFIs Turn Knowledge into Opportunity

May 1, 2026 – 

Read time: 7 minutes

Knowledge matters. Every April, Financial Literacy Month reminds us that understanding how to budget, build credit, manage debt, and plan for the future empowers people to make their own informed decisions and secure long-term financial well-being. And yet, Americans struggle with financial literacy across the country. A 2025 study from the TIAA Institute and Stanford University found that U.S. adults correctly answered only about half of basic personal finance questions — a rate that has not budged since 2017. That is a real problem worth addressing. But knowledge alone does not close the gap. Other factors matter, including access to affordable financial products and transparency in lending markets.

Without all three of these pillars, a person can understand credit and still be denied a loan. An entrepreneur can complete a business plan and still be unable to choose the best loan product due to confusing terms and obscured, high interest rates. A family can prepare for homeownership and still find that affordable mortgage products are out of reach.

Community development financial institutions (CDFIs) recognize this comprehensive approach to financial well-being. By complementing lending products with borrower education and responsible loan disclosures, CDFIs are uniquely positioned to help borrowers move from abstract knowledge to practical application toward financial empowerment.

Why Borrower Education + Capital Access + Transparency Matters

In communities underinvested in by mainstream finance, people may face limited banking options, rigid underwriting standards, limited resources to navigate financial concepts, or financial products that do not reflect their circumstances.

Alternatively, CDFIs meet people where they are. They listen to community needs. They create pathways to opportunities that help individuals, families, and entrepreneurs move forward — not just with knowledge, but with the capital and coaching to act on it. At Opportunity Finance Network (OFN), we describe this model as Capital Plus — access to accessible financing, paired with the education, coaching, and trusted relationships that help borrowers build lasting financial health and wealth.

But even borrower education and capital access are not enough when transparency is lacking. High-cost, predatory lenders commonly rely on obscured loan terms, buried fees, and complex contract structures — tactics that can confuse even the most sophisticated borrowers. Certified CDFIs, on the other hand, are held to high transparency standards and provide consistent, comparable information on loan terms and cost. Financial education, technical assistance, and business transparency are built into the CDFI business model — and it benefits everyone involved.

This combination of literacy and transparency, along with access to products that truly work, is a powerful tool in protecting against predatory practices and maximizing economic growth.

What This Looks Like in Practice

Across the OFN network, CDFIs are helping turn financial knowledge into real opportunity.

Supporting small businesses means supporting communities, and that is true of OFN member Renaissance Community Loan Fund (RCLF)’s financing for Julia Green. The owner of LaBella’s Salon in Gulfport, Mississippi, employs local stylists at her coastal location, sells extensions and wigs, and runs a local institute focused on hands-on cosmetology training — all of which bolster her community’s economic growth. When Green’s business grew, so did her impact. To elevate this growth, RCLF combined funding with guidance, providing business coaching to Green as she implemented her plans.

Since starting his business, William Rice of Sisseton, South Dakota, has purchased and renovated 14 properties — and he did it with the help of OFN member GROW South Dakota. The CDFI has provided over $650,000 in financing and more than 40 hours of business coaching to Rice over the years. Not only has he built his rental business with this support, but it has also allowed him to expand into lawn care and snow removal. Through his enterprises, he provides rental homes to many locals, including teachers, and essential services to his community. Working with GROW South Dakota has made a major impact on Rice’s life. He says, “Without the flexibility and ease of GROW [South Dakota] and their staff, I’m not sure I would own 14 rental properties today.”

OFN member Baltimore Community Lending worked closely with entrepreneur Sekwan Merritt of Lightning Electric when traditional banks would not. Before a dollar of financing was disbursed, the organization provided business coaching and built a tailored path to help him scale responsibly. That Capital Plus support positioned Lightning Electric to win a $1 million electrical contract for Baltimore Community Lending’s own new headquarters. He did not just wire the building. He demonstrated what is possible when capital, capacity, and community come together. The 15-month journey from coaching to contract is one of the clearest examples in the OFN network of how financial capability and access work together to create wealth.

OFN member Feed the Hunger Fund was there for Kahea Kaaihili of Mokuwai Piko Poi when traditional banks were not. A fourth-generation taro farmer in Honokaa, Hawaii, Kahea had the knowledge, vision, and community relationships — but existing debt and a lack of conventional collateral put mainstream financing out of reach. Feed the Hunger Fund provided flexible, mission-aligned capital paired with hands-on technical assistance, including a layered loan package to finance specialized farm equipment and consolidate debt. That Capital Plus support helped Kahea expand operations, reduce Hawaii’s dependence on imported taro, and sustain jobs in her community — while continuing to supply food access programs that feed thousands of children each summer.

What Financial Literacy Month Highlights

These stories reflect something larger about the CDFI industry and what it means to take financial opportunity seriously.

Through 2024, OFN members have provided more than $136 billion in cumulative financing in rural, urban, and Native communities. They have helped create and maintain nearly 3.8 million jobs, support 1.2 million businesses and microenterprises, develop 3 million housing units, and finance 16,000 community facilities. The industry’s net charge-off rate of 0.58% demonstrates that responsible lending to underinvested communities is not charity. It is sound finance.

That scale of impact is possible because CDFIs do more than make loans. They help people build confidence, strengthen skills, and access the tools they need to create opportunities for themselves, their families, and their communities.

This April, the question is not whether financial literacy matters. It does. The question is whether we are serious about pairing it with the access people need to act on what they know. CDFIs are that infrastructure. They have been for decades. CDFIs are the right vehicles for advancing financial literacy.

Learn more about OFN and find a CDFI near you through the CDFI Locator.

---

Our Policy Recommendations

For decades, CDFIs have operated at the intersection of financial education and financial access. This makes OFN uniquely positioned to advocate for best practices, policies, and frameworks for success in the industry. Below is a summary of some recent recommendations that OFN made to the U.S. Department of the Treasury and the Financial Literacy Education Commission on updates to the National Strategy for Financial Literacy.

• Apples-to-apples comparisons allow borrowers to reliably differentiate between safe and abusive financial products. We advocate for market transparency, so borrowers can recognize and avoid predatory lending. Holding all lenders to the high transparency standards of CDFIs, along with implementing small business lending reporting requirements, will provide another layer of protection. Additionally, policymakers should establish uniform small business lending disclosure standards that bring transparency to loan pricing and terms.
• Education and lending together support long-term success, but rather than creating new standalone financial literacy delivery initiatives or fragmented education with limited impact, the federal government should build on existing federal investments into CDFIs. Disbursing consistent and reliable awards to CDFIs through the CDFI Fund is the most efficient way to support these financial literacy efforts.
• Small business ownership is an essential wealth-building pathway for many low-income and rural households. We recommend that the federal government continue to support and provide resources for the Program for Investment in Microentrepreneurs (PRIME) and the Microloan Program.

---

Save the Date

---

Stay Connected

Subscribe to receive regular updates straight to your inbox and check out our blog for the latest coverage from OFN and the CDFI industry.

Follow us on social media.

More From OFN

Tags: Access to capital, CDFIs, Community Development, Community investment, Economic Opportunity, Impact Investing, OFN Membership, Small Business