California public power utility SMUD is participating in a program designed to enable local community banks to provide loans to local businesses with the goal of economic growth and business expansion.
SMUD on Dec. 6 said it has made three deposits of $5 million each to three banks that are part of the Responsible Investments for a Stronger Economy program, also known as RISE, which encourages local agencies like SMUD and others to make deposits in community banks that can provide much needed capital and improvement loans.
The banks will loan at least 50 percent of the funds in the SMUD service area to qualified applicants and will provide reports to SMUD on the loans made and projected number of jobs created.
RISE is a program developed by Region Finance, a local non-profit that advocates for local economic development and job creation.
SMUD said that from an investment perspective alone, the move benefits the public power utility as the deposits will be fully collateralized and FDIC-insured and will return a rate comparable to the state of California’s Local Agency Investment Fund, while allowing same day withdrawals.
More importantly are the opportunities these funds will provide for local businesses and the regional economy by having significant capital available for lending, SMUD said.
For more information about RISE and Region Finance, visit regionbusiness.org/region-finance/.