Microenterprise Deposits partially collateralize microbusiness loans to expand CDCUs’ microlending in local communities. Federation Microenterprise Deposits typically collateralize 25% of the value of a microenterprise loan. The purpose of the micro-enterprise deposit is to “share” the risk between the credit union and the Federation. The collateralized portion of each loan is the share of the loss the Federation is willing to take.
When the Federation’s deposit in the credit union matures, the credit union repays to the Federation the amount of the original deposit that was never used as collateral, if any, plus amounts used as collateral that represent the repayments by the microenterprise borrowers.
Federation member credit unions with low-income designation that meet our general Eligibility Criteria, have at least two years of general lending experience, AND at least six months of microlending experience are eligible to apply for Microenterprise Deposits.
The Federation makes Microenterprise Deposits of up to $25,000 for three year terms. Interest rates are variable. Please contact us for current rates.
How to Apply
Download and complete the Microenterprise Deposit application form and submit with required documents by email to the Federation per provided instructions. Applications for risk-sharing deposits and secondary capital are accepted on a continuous basis but are considered for approval only at the triannual meetings of the Community Development Investments Committee.