Impact Investing: A Fintech Connecting Corporates with Communities

By February 16, 2021September 7th, 2022No Comments

CNote helps companies including Mastercard connect with community development financial institutions.

Community development financial institutions (CDFIs) have emerged as an effective and attractive tool for corporates initiating or accelerating their commitments to impact investing amid the broader push for diversity and inclusion (D&I).

  • Members of NeuGroup’s Treasurers’ Group of Mega-Caps (tMega) recently heard how a women-led fintech called CNote is simplifying the process of connecting with CDFIs that, in turn, lend capital to borrowers in underserved communities.
  • “CNote is moving money where it’s needed the most,” CEO Catherine Berman said at the meeting. “Since we work with so many institutions, we get the deposits where they’re needed when they’re needed.”
  • Among the corporates making use of CNote’s platform is Mastercard. Representatives of the company joined CNote for the tMega presentation, part of a NeuGroup series designed to connect treasury and finance teams with innovative fintechs.

Mitigating risk, preserving capital. CNote says it streamlines community investment for corporates by removing common friction points, minimizing risk and simplifying administration and data collection processes.

  • Using a network of federally certified CDFIs, its system allows companies to deploy capital at scale, increasing access and funding loans that have a tangible impact, CNote says.
  • CNote’s technology services make it more cost-effective for corporates to directly support community organizations and lenders by simplifying the identifying, servicing and impact reporting efforts through data and automation, the fintech says.
  • CNote also offers customized impact investments, allowing corporates to construct offerings tailored to specific goals and objectives.

Insured deposits. Mastercard originally supported CNote through its start-up engagement program, and more recently—with contributions from Mastercard and the Mastercard Impact Fund—made a $20 million commitment to CNote’s Promise Account.

  • The account is a cash management solution that’s structured to provide FDIC and NCUA depository insurance coverage of all funds while giving institutional investors a single place to put their cash to work.
  • CNote says this single point of management reduces the administrative burden that would exist when manually monitoring and opening deposit accounts across numerous CDFIs and makes it easy to scale investments on demand.
  • Recognizing the critical role CDFIs can play in providing access to funding and pathways to financial security for underserved communities, the Mastercard Center for Inclusive Growth partners with many leading CDFIs and innovative firms like CNote operating in the community finance ecosystem.

Measuring impact. To show how investments are put to use, CNote provides reports to corporates and publishes borrower stories on its website highlighting the personal tales of success of people impacted firsthand by the financial support provided by CDFIs and companies’ deposits in them.

  • “In the reports there are some examples of the women entrepreneurs or the black-owned businesses that have grown or started because of these deposits,” Ms. Berman said at the meeting. “We show that we are making sure your deposits are going toward the areas [that companies target].”
Justin Jones

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