In December 2018, OFN released the 20th edition of its Opportunity Finance Institutions: Side by Side publication, an annual reference guide for CDFI industry practitioners, investors, and others interested in assessing the opportunity finance industry’s activity and performance. This edition uses FY2017 Annual Member Survey data from 214 OFN member CDFIs to illustrate numerous peer group analyses split by primary financing sector and asset size.
New to this year’s report, we added an alphabetically-sorted list of OFN members (Table 5a) with their peer group, allowing readers to quickly find tables relevant to each CDFI. Table 5b and Tables 6 through 12 now include total assets, and we added a current ratio (current assets/current liabilities) calculation to Tables 6 through 12.
The most salient data point from the FY2017 annual survey is the favorable trend in net charge-off ratios. Among all loan funds, the average net charge-off ratio decreased from 1.2% in FY2016 to 0.86% in FY2017. Except for CDFIs primarily lending in the business and consumer sectors, whose net charge-off ratios were relatively unchanged, lending sectors showed substantial decreases in net charge-off ratios and several peer groups exhibited negative average net charge-off ratios. Apparently, 2017 was a strong year for recoveries in many CDFI lending sectors. More analysis to come in 2019!
For investors, Side by Side is an excellent resource for understanding relevant aspects of the opportunity finance industry. Including key ratios on financing and operations, the report helps investors evaluate opportunity finance institutions for future investment, in addition to benchmarking current CDFI investees against their peers. With more than 30 peer groups across seven financing sectors to compare, Side by Side is a uniquely valuable resource.
For CDFIs, including non-OFN members, Side by Side is an important resource for comparing your organization’s activities and performance against peers. Peer group comparisons can inform management and operating decisions related to strategic planning and performance objectives, among other initiatives. For CDFIs in an expansion or reorganization phase, this information can help identify key differences in performance and financial composition among CDFIs operating within various lending sectors and asset sizes. Many organizations use Side by Side to inform and educate their boards of directors, funders, and investors.