Six years after Hurricane Maria battered Puerto Rico, killing almost 3,000 people and causing $139 billion worth of damages, the island is still rebuilding. To support these vital restoration and climate resilience efforts, residents turned to a local mutual aid model known as cooperativas. When Puerto Ricans were completely isolated, with no power, communications or banking system, cooperatives opened within two days and began creating workarounds to support residents.
Today, these co-ops are undergoing an important transformation: Many are gaining recognition from the U.S. government as community development financial institutions, or CDFIs. And with that comes some important perks, namely access major new funding and grant opportunities.
“Arising from the ashes is actually a flourishing CDFI sector, and these CDFIs are actually helping bolster the island's financial system and helping the poor people prepare for other natural disasters,” says reporter Christopher Williams, who covered this movement last year. Before Maria hit, there were eight CDFIs on the island. Now, there are close to 100 institutions, serving about a third of the population.
That growth is in large part thanks to the work of Inclusiv, a New York City-based CDFI that provides access to financial tools to low-income Puerto Ricans. To support those people who had long relied on the island's cooperativas, they're helping cooperativas become certified as CDFIs with the U.S. Treasury Department.
“The way that Puerto Ricans do cooperatives and do the credit union movement is a bit different from how it's done in the U.S.,” says Rene Vargas Martinez, the director of Inclusiv's Puerto Rico Network. “It really replicates us as a people. Our culture is a culture of solidarity. We help each other when there are crises.”
To learn more about Puerto Rico's financial cooperative movement and its growing CDFI network, listen to this episode below or subscribe to the Next City podcast on Apple, Spotify, or Goodpods. And for more such stories, check out our ongoing CDFI Futures series where we're exploring the community development finance industry through the lenses of equity, public policy and inclusive community development.
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