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To create growth and equity, empower entrepreneurs in historically disinvested neighborhoods

As U.S. Sen. Tina Smith says, access to banking services for marginalized communities is both an economic driver and a civil rights issue. The bipartisan legislation she has introduced would drastically expand access to startup capital.

Sen. Tina Smith
Sen. Tina Smith
REUTERS/Tom Brenner

In our state, there is a wealth of untapped potential waiting to be unleashed in historically disinvested neighborhoods. These entrepreneurs are our nation’s greatest unutilized asset. To advance equity and growth in Minnesota, it’s time we realize their potential.

Historically marginalized neighborhoods have long endured systemic barriers that limit access to capital, resources, opportunities and training, creating a vicious cycle of poverty, unemployment and limited economic mobility. As the head of the Neighborhood Development Center (NDC) in Minnesota, I am privileged to witness the transformative power that entrepreneurship can have for these underserved communities.

With $4 million in support from Wells Fargo and other generous partners, we are proud to have assisted thousands of low-income individuals in our state grow small businesses from startup to expansion. We provide these entrepreneurs — primarily people of color — training, business loans, business services and access to real estate. This is part of an entire ecosystem of Community Development Financial Institutions (CDFIs) in Minnesota, including the Latino Economic Development Center (LEDC), African Development Center (ADC) and African Economic Development Solutions (AEDS).

The results of this work are not only better standards of living for our entrepreneurs but also powerful engines for revitalizing communities.

Locally, they create jobs and fuel economic activity in their neighborhoods, while promoting strong community role models and establishing dynamic community gathering places. Nationally, these businesses are a driving force behind broader economic growth. Small businesses create more than 64 percent of total new job growth in the United States.

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That’s why we must make supporting entrepreneurs in historically marginalized neighborhoods a national priority. In March, U.S. Sen. Tina Smith introduced bipartisan legislation to jumpstart economic development in economically distressed areas by improving access to capital for entrepreneurs in these communities.

Smith’s bill would strengthen and expand Community Development Financial Institutions (CDFI) by reducing the minimum loan size they can offer, which would drastically expand access to these funds. CDFI was created by Congress to bring capital and financial services to a wide range of underserved communities. As Smith has rightly said, access to banking services for marginalized communities is not just an important economic driver, but also a critical civil rights issue.

Renay Dossman
Renay Dossman
Minnesota and the United States are currently in a “startup slump” with the rate of new businesses falling to a 40-year low, reducing economic growth, jobs and incomes for struggling families. Entrepreneurs in historically disinvested neighborhoods can reverse this trend and be the catalyst for economic growth.

Proposals like Smith’s are an investment that will pay dividends by revitalizing communities and igniting a cycle of progress in areas that for too long have been historically overlooked. Empowering these entrepreneurs will address systemic disparities and create a ripple effect of positive change, creating a stronger, more prosperous and more just economy.

Renay Dossman is the president and CEO of the Neighborhood Development Center (NDC).