Community and economic development banks give loans and financial support to low income families and businesses in underserved cities and countries. If you're looking to start a business, but couldn't get funding from one of the large banks, these banks provide a second chance. Conversely, they're a great way for companies who have no problem with financing to help boost the public image and invest in many communities, both locally and abroad. These banks are not charity and the ones with a sound business model can provide a competitive return on investment.

Economic development banks opportunities are available in most every region of the world. These banks typically work with smaller amounts of capital compared to the larger banking conglomerates. Bank finance development through these entities can be an excellent way to use a company’s profits to build a stronger community, country or world. However, before you ask for loan or invest in these economic development banks, you need to consider the following:

1. Realize the structure and basic mission of an economic development bank.

2. Contact the international community development banks.

3. Compare the opportunities of U.S. and international community development banks.

Action Steps
The best contacts and resources to help you get it done

Examine the goals and purpose of community development banking

Whether the development banks location is in your neighborhood or halfway around the world, it's imperative to use the basic structure of these organizations to make an informed capital investment decision. If you know the essential mission and goals of these banks, it'll help your company properly allocate assets.

I recommend: Download the Asian Development Bank Toolkit for an understanding of how international development banks operate. Review the article from MSN Money for a summary of economic development banks. Contact the Community Investment Center for details on development banks in your area or around the country.

Take a online tour of the development banks around the world

Like their U.S. counterparts, international development banks try attract capital investment from companies to provide support to underserved businesses. They just do it on a much larger scale than a community bank in your local area. For U.S. businesses, investment in these banks not only provides a means to fund an emerging market but it also can be a sound business investment, especially if your company wants to expand operations to these areas.

I recommend: Contact the Development Bank of Singapore, Caribbean Development Bank, Asian Development Bank and Hungarian Development Bank for a prospectus on potential investment opportunities. Each of these banks offers their own unique set of opportunities and challenges.

Contrast the international and U.S. development banking opportunities

If your business wants to attain a small amount of financing locally, the large banks offer community development loans and there's also the North American Development Bank. In addition, these banking entities provide the ability to invest in your local community or in bordering countries.

I recommend: Speak to a representative at Bank of America about their community development program. Review the U.S. investment options at the North American Development Bank, which helps the communities on or near our borders. Examine the Louisville Community Development Bank, which is an example of a localized development bank.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Economic development banking is like any other business in that it can have faulty management or be subject to flawed local business model. Therefore, be sure to investigate the history of any community development bank before you invest or enter into a loan contract.