According to Galileo CEO Clay Wilkes, an overlooked component of addressing systemic racial injustice is financially empowering communities of color.
In a commentary published on August 13 in Fortune.com, Wilkes makes the case that efforts to promote financial inclusion have largely fallen short and economic development continues to stagnate particularly in communities of color. He suggests an antidote to this stagnation is enabling minority depository institutions (MDIs)—essentially minority-owned banks—and community development financial institutions (CDFIs)—financial institutions certified by the Treasury Department to provide credit and financial services to underserved markets and populations—to qualify for Opportunity Zone–type investments. Such a change would require revising the law governing Opportunity Zones.
The result, Wilkes argues, would change the economic environment in which MDIs and CDFIs operate. They would benefit from an inflow of capital and democratize distribution enabled by digital banking for deposit taking and asset generation. These changes would boost the banks and the communities they serve, creating a banking structure for social justice money to flow to.
For more on Wilkes’ powerful—yet simple—solution, including comments from Christian Duffus, a fintech entrepreneur and founder and CEO Of Fonbnk, please read his complete commentary in Fortune.com.
And, if you have additional thoughts about how the financial system participants can address systemic racial injustice, please contact us at info@galileo-ft.com.
We’d love to enter into a dialogue on this important and timely topic.
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