Lending to Indigenous Businesses & Building Capacity and Power in Native Communities

About This Project

Established in 2018 as the lending and investment subsidiary of NDN Collective Inc, and based in Rapid City, South Dakota, NDN Fund is an emerging community development financial institution (CDFI) with a growing national footprint. A $5 million loan from the Robert Wood Johnson Foundation (RWJF) will help expand its lending programs to Indigenous businesses and communities to reach a national scale.

As NDN’s largest investor to date, RWJF sees an opportunity to help attract additional investors and address systemic barriers in lending to improve health and economic prosperity. Previous investments averaged $2 million each. As part of its impact investments strategy, RWJF seeks to provide capital to organizations that the more traditional finance system has overlooked, underinvested in, or inappropriately labeled as risky.

Challenge

Native communities face wide health and economic disparities, due to the intentional extraction of resources from their communities, a lack of public- and private-sector investment, and other structural barriers to opportunity, including a lack of capital and credit for Native communities, residents, and businesses through direct lending. 

Native CDFIs stimulate economic and community development efforts on Native lands. To date, they have primarily received financial capital from government rather than banks, corporations, or other private investors, limiting their ability to grow and scale and keeping the Native CDFI industry small.

Solution

NDN Fund makes loans through two Special Purpose Credit Program-designated pools, coupled with capacity building and technical assistance for its borrowers: 

• The SEEDING (Social Enterprise & Economic Development for Indigenous Growth) loan program capitalizes large-scale infrastructure projects that need more than $500,000, focusing on renewable energy, community development and housing, sustainable infrastructure, social enterprise, and agriculture that require large-scale capital to launch or expand developed concepts or pre-development, construction, or bridge capital.
• The Relief & Resilience (RR) loan program provides small business loans less than $500,000 to Indigenous businesses and entrepreneurs, such as local retailers and construction service providers. The product includes specialized technical assistance for some borrowers to remove barriers in accessing the capital.

NDN Fund’s revolving loans use investments from philanthropy and others to create non-extractive investments that generate wealth that stays in the community.

In the Spotlight

NDN Fund’s loan to Indian Township Enterprises, the economic development arm of the Passamaquoddy Tribe at Indian Township in Maine, allowed it to buy equity shares in American Unagi, the only U.S.-based aquaculture company supplying eels to domestic seafood markets, putting Native values of regeneration and resilience into practice. 

Eels have been a traditional food of the Passamaquoddy for centuries, with at least 50% of community members harvesting each spring. The Tribe had previously been unable to acquire a loan or interested investor. This “Eel Deal” enables the  Passamaquoddy to partake in cultural practices while being paid fair market prices for catches. The deal also helps strengthen the Tribe’s sovereignty and self-determination to grow and expand the types of businesses it operates, using practices aligned with its cultural values and ways of life. 

NDN Fund Impact Measures

Promotion of:

• Financial power, including increased funds, quality of infrastructure, affordable housing, access to renewable energy, number of social enterprises, and Indigenous Peoples living above the poverty line and having community ownership.
• Social power, including increased connection of Indigenous Peoples; public recognition of challenges and opportunities; speakers of Indigenous languages; culture reflected in governance and decision-making; legal infrastructure aligned to Indigenous values; and understanding, use, and leveraging of concepts of equality and justice.
• Political power, including increased passage of legislation protecting Indigenous Peoples; and more Indigenous Peoples holding office, approving decisions made about their land, regulating and owning schools, and having the knowledge and tools to create and change policy.

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