Arizona is booming with new residents and businesses, but many of the smallest players are still scrambling for the cash they need to grow. A new statewide snapshot says community lenders are doing their job for small businesses, nonprofits and rural and Tribal communities, yet do not have the same access to bank-backed borrowed capital that their peers enjoy in other states. That mismatch, advocates warn, leaves loans sitting on the sidelines just as development surges across Phoenix, Tucson and small towns.
Early findings from the Arizona CDFI Network's early findings show banks supply only about 10% of borrowed capital to Arizona community development financial institutions, compared with roughly 34% nationally. For CDFIs that focus on small businesses, the bank share drops to around 3%. The report also finds Arizona CDFIs are paying roughly twice the national average cost of capital, which sharply limits their ability to scale. Taken together, the study describes the problem as a “capital gap, not a capacity gap” across the state’s community lending system.
Network co-chairs Andre T. Whittington and Amber Cordoba, who penned a sponsored summary of the work, describe those numbers as a “systems opportunity” to better align banks, philanthropy and public partners. As reported by Phoenix Business Journal, they argue that coordinated investments and a clear investment playbook could push capital into neighborhoods and sectors that have long been overlooked.
How Much Could Flow, And Who Wins
The study does not just wave at the problem, it runs the numbers. If Arizona’s CDFIs received bank investment at the same levels as their national peers, they could unlock roughly $200 million in additional lending capacity. Over the past 20 years, nearly $6 billion in capital would have flowed into Arizona communities if the state had matched national averages. That money would have shown up as more small-business loans, more financing for community facilities and more affordable housing capital, the report says. According to the Arizona CDFI Network's early findings, the state’s rapid growth makes those missed dollars an especially costly opportunity gap.
Study Partners And Next Steps
The Capital Reimagined effort is funded with support from Wells Fargo and led in partnership with NALCAB, which this week shared the study’s initial themes in Phoenix and urged banks and funders to consider statewide coordination. In a post, NALCAB said the full landscape analysis is expected later this summer, with an Investment Playbook to follow in the fall. The Network is also producing a short documentary that aims to bring the data to life through borrower stories and lender perspectives.
What This Means On The Ground
Local lenders say more predictable, lower cost bank investments let CDFIs underwrite smaller loans and provide the kind of technical assistance that can turn early-stage firms into bank-ready customers. As Phoenix Business Journal noted, the Network’s co-chairs argue that CDFIs act as a bridge to scale. They help make borrowers investable for mainstream banks and channel institutional capital into underserved neighborhoods. If banks, philanthropic funders and public agencies move in concert, the report suggests, Arizona could turn its population and business growth into more broadly shared economic gains.
The early findings serve as both a diagnosis and a rallying point. They offer concrete targets for where lenders and investors can focus and set the stage for the full report and investment playbook expected later this year. For Phoenix and other Arizona metros, the choice is whether to let capital stay fragmented or to build the pathways that expand local lenders’ reach. The Arizona CDFI Network is inviting financial institutions, civic leaders and funders into those conversations as the work continues.
