Q&A With OFN’s Lisa Mensah
For 40 years, Community Development Financial Institutions (CDFIs) have become leading partners for banks, foundations, and governments engaged in community economic development. Lisa Mensah, President and CEO of Opportunity Finance Network (OFN), assists CDFIs to leverage public funding and private investment to bring affordable, responsible capital to rural, urban, and Native communities underserved by mainstream finance.
Since joining OFN in 2017, Mensah attracted new visibility and investment to the CDFI field through programs such as the Grow with Google Small Business Fund and OFN’s Finance Justice Fund, a $1 billion socially responsible investment with Twitter as the Fund’s first investor.
In a recent Q&A session, Mensah revealed insights into the world of CDFIs and their critical role as “financial first responders,” amid unprecedented times.
Tell us your story before OFN, including your experience working for the Obama Administration?
I’m the daughter of a Ghanaian immigrant and a mom of German and English extractions. I always thought I’d do something that would be international in scope, and that took me back East to study at Harvard, where I majored in Government and International Relations. Somewhere along the line, I realized that all the issues that I cared about had to do with money, so I ended up starting my career in banking. I learned commercial banking at Citibank and then moved to the Ford Foundation, where I spent 13 wonderful years getting to know the sector that I am now part of—the community financial sector.
I was asked to lead a program at Ford that was a rural development, world poverty, and resources, which I picked up on in the Obama Administration. Rural communities were always very close to my heart—they made sense to me. That is what took me to the Obama Administration.
Can you tell us a little bit more of what gravitated you to the CDFI space afterward?
Of course, it’s actually a story I had to tell at the Obama Administration because the Department of Agriculture didn’t know a whole lot about community development financial institutions, and in the department, I was a lender to rural communities. That’s the base of CDFIs; some are banks, some are loan funds, some are credit unions, some are community venture capital funds. But in all forms, CDFIs have the same objective, to develop our communities through finance in struggling parts of our economy where traditional finance doesn’t reach or where some finance reaches, but at terms that aren’t very fair. I love that about this field of community development finance, and I loved introducing many CDFIs to the Department of Agriculture.
You’ve been a part of OFN for 4 years now, can you tell us more about OFN and the work you have been doing over those 4 years?
I get to lead an organization that’s over 30 years old and I’m standing on the shoulders of so many people who invested in this field early on and who believed that there was a way to take capital into low-income communities.
From my days at the Ford Foundation, what I learned is you have to listen to the folks who were doing the work. So my first years there, we spent a lot of time listening to the members—what did they need? What did they feel were their biggest challenges? We heard loud and clear that they needed appropriately priced capital to be able to grow. So think of OFN as a provider of investment services to our members, meaning we need to be a good conduit, particularly for those of us who weren’t in a rich area. They weren’t in the footprint of major banks, they didn’t have major foundations in their backyard, they were doing powerful work, but they weren’t advantaged.
We also heard loud and clear that we needed some new operating models—people knew that the job of lending had changed and technology had arrived. People wanted stronger ways of becoming more efficient and they wanted a simpler narrative—an easier way to explain why we were important. To be able to say this isn’t a hobby, we aren’t junior banks—we have a vital role to play in the provision of capital in this economy. I called it the ‘money strength of voice challenge’, and those were the things that I heard loud and clear and what I’ve been working on for the last four years — how to get louder, how to bring more funds. So I have been very dedicated to helping the field take the next big step.
Is there a world where we can bring FinTech and CDFIs together? And, how do we amplify CDFIs through technology?
Yes, there is a way that the two fields of FinTech and CDFIs can work together and strengthen one another. I mean, it’s not often that tech is incented the same way and I think we can align our missions since the point of a CDFI is a fair deal to a struggling entrepreneur and the small business owner. It’s time to work the housing deals and the facilities deals and the deals around daycare centers and we are talking mostly small businesses. But honestly, this is not a monolithic CDFI industry. There’s a lot of diversity in products that I don’t know that we’ve seen the end of all of the creative partnerships that could happen.
CDFIs are uniquely positioned to access subsidized capital through stakeholders and coalitions, but what do you say to the skeptic who doesn’t believe the CDFI model scales?
I used to say, come see it—come see what we’re doing. Maybe not everything is going to attract our investor group, but come see what we’re doing. Honestly, it’s powerful to see what some of our native CDFIs have innovated around.
The innovation is strong and the need is huge. We won’t be a match for every investor, but I think the investors who are seeking double and triple bottom lines do need to see what we have been able to do. I think when we are aligned, to your point in this micro entrepreneur model, you’re going to prove some scale here, and that’s powerful. It’ll be a bet exactly where the deep market need is and yet has not been met by current investors.
Many banks have left areas where some of our deepest urban CDFIs are working to find value. So I like what a new investor forces you to do or a new pitch to an investor forces you to do. It forces you—and I will say, me as a defender of CDFIs—to clarify what we’re good at and if we can’t meet your terms, so be it.
So I think there’s a need to match up to our investors with what we can promise. I think there’s more there than we’ve been able to argue in the past, and I’m pretty confident that we are worth the look. Come see what we’ve been building in our communities, what hyperlocal yields for us, and see if you can be part of this. We’re ever hopeful about being in some of these new asset classes. Maybe we’re closer to a bond-style yield than some other investment asset classes.
I’d like to know what fundamental fairness means to you?
Well, the word that shouts out for me is a word that’s been a mantra for me, and it’s really about justice. What does justice look like? For me, justice is how we get to make things fair. Fundamental fairness to me is acknowledging that everything doesn’t start out fair—people are born into different circumstances, people have different starting lives.
What is it that makes the journey fair? I think about this question going deeper on being ‘just’, so I lead a CDFI network because I believe we can do better for all of our American population. I believe in a very rich country, which I was so proud to serve as a public servant and which I am a proud citizen of, we can make a huge dent to close wealth gaps and make the economics of our country more just. It will always take work, it will always take a fight, but fairness to me is about everybody getting a fair shot, a chance.
I’m just deeply proud to work in an industry where that’s what people get up in the morning to fight for these creative ways in so many diverse places. I am proud to be part of a field that I think is striving and adding to a more fair economy.