Citi's Impact Fund. Comments by Nathan Pratt, Impact Investing Intern, University of Maryland.

With the record levels of profits banks have made in 2019, Citigroup is responding by allocating a portion of this money for investments in companies with positive social impact. Citi announced they are starting a $150 million Citi Impact Fund, which will also help fund minority and women owned businesses.

Businesses of this nature represent great potential economic growth for a number of reasons. First, minority and women owned businesses are underrepresented in overall business activity due to structural flaws in the banking system. I believe there is great demand for them.

Given the reality that lack of access to credit is one of the biggest hurdles these entrepreneurs face, the Citi Impact Fund could help address this issue. Furthermore, investing in businesses that promote positive social impacts would likely be beneficial to the average citizen, considering these firms attempt to help provide better infrastructure, access to information, and sustainability.

In conclusion, the C…

Review of "Income Inequality, Record Bank Profits and the Citigroup Impact Investing Fund" by Minwoo Kim, Impact Investing Intern, American University.

These days, it seems that sustainable investing is a global trend. In this context, Citigroup seems to want to join the trend of the times through impact funding.

I think it is important to decide which business to invest in using criteria related to the positive impact on society such an investment may have. The question seems to be whether to place the selection and evaluation standards totally on the potential to succeed financially or on equality related factors such as status of the business owners as minority or women.

From a purely economic point of view, it would seem to be much better to put full importance on the potential to succeed financially. But we should also take the global trend toward consideration of equality and sustainable growth into account.

Though Citigroup plans to invest in minority and women-owned businesses, one concern is how can those business keep growing and move forward to the mid-long term. I think a good solution to this concern is to utilize a ‘bu…

Citi's Impact Fund. Comments by Jalil Boulahssas, Impact Investing Intern, University of Richmond

As Citigroup establishes its $150 million Impact Fund, it takes aim at the issue of funding minority-owned businesses. A fund like this one should look to create a successful equity financing vehicle in a sector with few sources of financial support.

Banks have extended less credit to small firms than they did prior to the Great Recession. According to a Richmond Federal Reserve study, 51% of black-owned small businesses experienced challenges in the availability of credit, compared to 30% of white-owned small businesses. (1)

This trend is also seen in the size of loans received. A smaller share of black, hispanic, and female-owned businesses tend to receive loans over $100,000 and they are also more likely to use owner loans than white and white-male owned businesses. (2)

This points to the larger trend that, while black-owned businesses are the most likely to apply for bank financing, they are the least likely to receive full funding, with only 31% receiving the whole amount reques…

Review of Citi Impact Investing Fund article by Yutong (Erica) Wu, ESG | Impact Investment Intern, Georgetown University.

My review of  Income Inequality, Record Bank Profits and the Citigroup Impact Investing Fund follows.

Business, government, and technology are three forces driving a society's sustainable development forward. Specifically, by providing equity funding to minority and women-owned businesses, Citibank is providing a practical solution to supplement traditional economic tools driven by the public sector, government, and international institutions.

These tools, like income redistribution (tax), regulation, and international initiatives, are no longer enough to eliminate social inequality, particularly income inequality, that are as a result of social division, history, culture, and social stereotypes from last century.

One "side concern" that comes with the growing trend that businesses take responsibility for social or environmental issues is that, instead of focusing on the issue itself, some businesses may treat this responsibility as a marketing tool. This is the reason …

Hope or Hype? Citigroup's New Impact Fund

Banking giant Citigroup recently announced the launch of the $150 million Citi Impact Fund. (We have long been concerned with Citi, having filed an October 1998 petition in the US Court of Appeals for the DC Circuit (Case Number 98-1459) concerning the merger that created the bank. In our appeal, we noted that our economic models showed evidence that growing financial market malfeasance greatly exacerbated risks in financial markets, and that this would lead to a financial downturn.) Citi now claims it “will make equity investments in ‘double bottom line’ private sector companies that have a positive impact on society.” These investments in U.S.-based companies (not individuals) will be made using the bank’s own capital. Citi states that it is looking for innovative companies in workforce development, financial capability, physical and social infrastructure and sustainability. Citi has committed to providing seed funding for businesses that are led or owned by women and minority entrepr…

The Right to a Roof: Tackling Homelessness. Nathan Pratt, Impact Investing Intern. University of Maryland.

This symposium included the input of lawmakers and experts in the field of homelessness, as they attempted to address its causes, impacts, qualities, and solutions. While an obvious cause of homelessness is the lack of affordable housing, other factors played a role including poverty, income disparity, mental health, unemployment, lack of resources, and discrimination. Each of these factors can lead to temporary or even permanent homelessness.

Some lawmakers focused on youth struggling with the effects of homelessness. Representative Danny K Davis claimed that one issue was that, while resources are available, they are not properly targeted to youth. He cites a lack of educational programs and institutions as a significant issue. Representative Lowenthal’s district in California serves as an example that other issues, such as mental health, can sometimes play a larger role than poverty, as he approximates that 1 out of 4 high school students are in and out of homelessness in a relati…

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