By The Star Staff
The federal Treasury Department, in a significant move to bolster the lending capacity of credit unions and address the escalating need for economic and community development in Puerto Rico, has announced an allocation of $10.2 million in grants.
The allocation is specifically for eight savings and credit unions and one local federal credit union, facilitated through the Community Development Financial Institutions Fund (CDFI Fund).
René Vargas Martínez, vice president for Puerto Rico and the Virgin Islands at Inclusiv, said that among the credit unions that received the competitive allocation are the Dr. Manuel Zeno Gandía Savings and Credit Cooperative in Arecibo, with $1.3 million, and La Puertorriqueña Savings and Credit Cooperative in San Juan, with $1.3 million.
Likewise, the Savings and Credit Cooperative of Caguas, the Savings and Credit Cooperative of Isabela, the Savings and Credit Cooperative of Lares and Central Region, the Savings and Credit Cooperative of Manatí, the Savings and Credit Cooperative of Valenciano in Juncos, and VAPR Federal Credit Union in Guaynabo each received $1.1 million. The Savings and Credit Cooperative of Lomas Verdes, Bayamón was awarded $1 million.
With the allocation, the total investment of the U.S. Treasury in Puerto Rico’s co-op system amounts to almost $322 million in the past six years. The grants have allowed the cooperatives to develop new financial products and offer online services such as mobile banking, check deposits and loan applications.
Vargas Martínez underscored that the new allocation is a testament to the pivotal role of cooperatives as catalysts of economic and community development on the island. The recognition should instill a sense of pride and involvement among the stakeholders, he said.
“Cooperatives continue to be key players in the economic development of Puerto Rico, and this investment represents an opportunity to continue expanding their impact in the communities they serve,” Vargas Martínez said. “With these investments, they will be able to expand their offering of personal loans, mortgages, small business financing, and affordable green loans. We reaffirm our commitment to eliminate barriers for cooperatives to access the same public and private sector investment tools as institutions outside the island, thus contributing to the economic development of Puerto Rico.”
Financial Assistance (FA) grants are competitive and are awarded in the form of grants, capital investments, deposits, and shares in community development financial institutions.
Vargas Martínez noted that, in this case, cooperatives must match dollar for dollar the federal funds received, which allows them to multiply the impact of the investment to meet the demand for accessible financial products in low- and moderate-income communities.
“FA funds are used to expand operations to new areas, serve new populations, offer new products, and increase the volume of financial services,” he said. “This support has facilitated the creation and expansion of companies, the generation of jobs, the development of affordable housing, and the increase in home financing, strengthening communities at the local and national level.”
Mabel Jiménez Miranda, executive president of the Corporation for the Cooperatives Supervision and Insurance Corp., stressed that the new investment is excellent news that confirms the strength of the cooperative sector and its ability to meet the highest regulatory standards while continuing to be key players in the island’s economic development.
“From our position as regulators, it is encouraging to see how the Puerto Rico cooperative system has achieved extraordinary results, backed by an investment of more than $312 million in CDFI funds,” she said. “Between 2018 and June 2024, we have witnessed sustained growth in key areas: the number of members has grown by 16%, assets have increased by 36%, and the loan portfolio has increased by 53%. The 147% increase in mortgage loan originations and 80% in commercial loans are clear indications that cooperatives are responsibly using their resources. In addition, the spectacular 1,198% growth in investments in green projects reinforces their commitment to sustainability. These figures not only reflect the cooperatives’ good financial management and ability to adapt but also represent positive news for the economic future of Puerto Rico.”
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