Over the past two years, Opportunity Fund has been busy designing, launching, and expanding our cross- sector collaboration with Lending Club, the largest online marketplace, and Craft3, a peer CDFI, to expand access to capital for small businesses. We’ve also taken time to reflect on the challenges we faced—and the lessons we learned—in building a first-of-its-kind technology platform to enable this unique referral partnership. Earlier this spring, Opportunity Fund’s research team conducted in-depth interviews with 18 stakeholders across all three organizations to better understand why and how this partnership came to be, and how what we learned can help facilitate future cross-collaborations
We used a partnership assessment framework to help us develop our interview questions, organize the findings, and assess the key takeaways. Essentially this framework states that effective partnerships maximize five key attributes:
We found that there are some essential attributes for a successful CDFI-Fintech partnership:
- A deep commitment and integration at all levels of the organization (leadership and staff, as well as other resources) is critical. This includes a willingness to invest significant resources in “non-program” staff.
- Full buy-in to the value of online lending for current and prospective customers, despite the tradeoffs inherent to a virtual lender-borrower relationship.
- An ability to make the business case to potential private sector partners.
For CDFIs and Fintechs:
- Mutual respect and trust are key ingredients. Partners must have willingness to share and a desire to help each other grow.
- Alignment around the shared vision of serving more small business owners together than either party could alone.
- A commitment to transparency and responsibility in lending.
- All partners need to have the flexibility and agility to iterate, adapt when things don’t go as planned, and be patient with the process.
- A genuine mission-oriented goal plus a compelling business case for pursuing a CDFI partnership
We shared these and other findings about the partnership in a webinar for peers, partners and funders. To learn more, download the slides or view the webinar recording here (please note that, due to technical difficulties, the webinar does not include the first few minutes of the presentation).
Later this summer we will release a paper detailing more about the partnership outcomes and relevant lessons for CDFIs, funders, and other stakeholders.