DEFINITION of 'Community Investing'
Investments made directly into low-income or disadvantaged communities through channels such as community development banks, credit unions, loan fund and microfinance institutions. Community investing is closely tied to socially responsible investing and focuses on economically improving run-down communities by offering banking services and small loans to fund businesses, non-profit groups and affordable housing initiatives.
BREAKING DOWN 'Community Investing'
Community investing can have a real and immediate impact on the social good of a nation or geographic region. As more people gain economic freedoms and access to good jobs and homes, there is less of a strain on federal social welfare programs, while at the same time increasing the gross domestic product and other aggregate measures of wealth and production.
Investors can help to fund community investing efforts by purchasing investments such as CDs from community development banks, or through offerings from community development loan funds and venture funds.