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Minority Depository Institutions: Paycheck Protection Program (PPP) Lending Insights

AUTHORS:

Anthony Barr, Research and Impact Director
National Bankers Association Foundation

Carl Romer, Research Manager 
National Bankers Association Foundation
Figure 4 AAPI, Black, and Hispanic MDIs each issued a greater share of their PPP lending t

Description


In response to the COVID-19 pandemic, Congress created the Paycheck Protection Program (PPP) to stabilize businesses and their workers. Minority depository institutions (MDIs) – mission-driven lenders that serve marginalized communities – played a vital role in supporting small businesses through PPP lending. In this report, we document how MDIs outperformed non-MDI lenders in deploying PPP loans and loan dollars to minority and low-income communities.  
Download Minority Depository Institutions: Paycheck Protection Program (PPP) Lending Insights
Published August 30, 2023

Download Minority Depository Institutions: Paycheck Protection Program (PPP) Lending Insights

Published August 30, 2023

The Early Bird Special ends on July 1, 2023.

Key Findings:

  •  119 MDIs collectively issued nearly 270,000 PPP loans and more than $16 billion in loan dollars. MDI participation in PPP lending was substantial across all MDI types.

  • MDIs loaned money to all 50 states, Washington, D.C., Puerto Rico, Guam, the United States Virgin Islands, American Samoa, and the Northern Mariana Islands. 

  • The average MDI PPP loan dollar went to a zip code that had a poverty rate of 18% compared to 12.3% for non-MDI PPP loan dollars and the national poverty rate of 11%. 

  • 79% of MDI loans went to minority or LMI communities versus only 47% of non-MDI loans. 

  • The median MDI PPP loan was $18,000 compared to the median non-MDI loan of $20,715. 


Implications:

 

  • This research demonstrates the importance of MDIs as first responders during times of economic crisis. 

  • Given their regular presence in underserved communities, MDIs are uniquely positioned to quickly deploy capital when it is needed most. 

  • Policymakers should continue to prioritize MDIs as key partners in implementing equitable fiscal policies and continue to drive capital to the sector so that the sector remains stable and well-positioned to expand and deepen its social impact.

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