Scaling impact by standardizing data: A conversation on how better analytics and collaboration can unlock more investment for community lending

Having more consistent definitions and standards about community lending data is one of the six shifts identified in our survey of small business support leaders that would make the small business ecosystem stronger. Data standardization can help a historically fragmented industry to collaborate more effectively, better understand its impact on local communities, and, perhaps above all else, attract more capital from outside investors.

In this interview, we talk to several experts to better understand what greater data standardization looks like in practice and how we get there.

By Sandy Fernandez

Community lenders such as Community Development Finance Institutions (CDFIs) play unique and critical roles supporting local small businesses. But their tailored and personal approach to the communities they serve can make it difficult to attract lending capital from large investors since they do not measure impact or report financial performance in a standardized fashion.

A Mastercard Strive USA survey of more than 30 of the nation’s small business leaders identified six key shifts needed to help more entrepreneurs succeed, one of which is to grow transparency and standardization efforts, especially around data, in order to unlock more investment. The lack of standardized, comprehensive data about small business lending and support also prevents effective policymaking and programming, as well as limits private sector investment, the survey report found.

The steps government and non-government actors such as CDFI coalitions and ratings agencies can take to improve small business data quality and standardization include:

• Developing industry-wide definitions and data standards that would help to crowd in more private sector capital.
• Supporting the development of new investment products that aggregate and package loans originated by different community lenders.
• Helping industry leaders develop and promote new data standards within the small business sector.

But what do these steps look like in practice? What precise data is required to attract new public and private investors, and how does the industry get enough buy-in across the board from community lenders to gather those insights?

Moreover, how can we drive more standardization in the data that tracks community lending — and thereby attract more outside investment — without sacrificing the deep local knowledge CDFIs have accumulated over decades?

To answer these questions, we asked three leaders from the Mastercard Strive USA community from the data, finance, and technology space to weigh in on the current state and how the industry can move from theory to practice. Their varied backgrounds offer different perspectives but all speak to a common thread: Adoption of industry-wide standards will strengthen investor understanding of small business lenders and attract more capital to support Main Street businesses.

For this discussion, we turned to Paige Chapel, the CEO of Aeris, a CDFI ratings agency that works to drive private sector capital to CDFIs through data and analysis; Jaime Aldama, president of Momentus Securities, which drives institutional capital to America’s small businesses and nonprofits and positions “social impact” as a fully investable mainstream asset class for institutional investors, and; Cat Berman, the co-founder and CEO CNote, a technology platform that matches impact investors to mission-driven community financial institutions, including CDFI banks, credit unions, and loan funds, through AI-driven matchmaking services.

Thank you for participating in this important discussion. To set the table for the conversation, what are your thoughts on the six shifts identified in the recent CEO Survey that data standardization and transparency needs to be promoted to attract new investments?

Jaime Aldama: Data standardization and transparency aren’t optional — they’re foundational if we want to unlock institutional capital at scale. History proves this. Look at the mortgage-backed securities market. It became a multi-trillion-dollar asset class only after standardizing underwriting guidelines, loan documentation and data reporting. That standardization gave investors what they needed: clear, comparable data to assess risk and deploy capital confidently.

In the community lending space, we hear the same thing from institutional investors. “We want in, but give us something we can underwrite.” Right now, every investment feels bespoke — not because investors want it to, but because many CDFIs define the same “small business loan” differently, underwrites differently and uses different performance metrics. There’s a saying in our field: “If you’ve seen one CDFI, you’ve seen one CDFI.” That reflects the beauty of how CDFIs serve their communities with tailored products and services. We believe that deep local knowledge and relationship-based lending must continue. But that doesn’t mean product definitions, back-end data, and reporting need to be bespoke, too. To scale impact, we need to separate front-end customization from back-end standardization. Investors don’t need every CDFI to lend the same way, just as there are mortgage lenders who differentiate themselves based on service and deep market knowledge. However, institutional investors often do need to see a clear rating from a nationally recognized statistical rating organization (NRSRO), and NRSROs, in turn, need to see historical track record across an industry that’s only possible when data and underwriting protocols are predictable.

Standardized data isn’t about homogenizing CDFIs, it’s about building the market infrastructure that can support their diversity and scale their impact. The lesson from capital markets history is clear: Data is the infrastructure that unlocks investment. It’s time for community lending to accelerate down that same pathway.

Paige Chapel: We know this is critical. Early in the COVID19 pandemic, policymakers struggled to find solutions for distributing Paycheck Protection Program loans to small businesses. They turned to CDFIs, but needed performance data on these financial institutions to be assured that CDFIs had the risk management capacity and track record to reach the mainstreet businesses that the federal program was targeting. Aeris provided them with longitudinal performance data that addressed many of the questions they had. But more data on more CDFIs is needed to spur innovation and attract new capital.

What does data from CDFIs need to look like to tell a compelling story for new investors not only about a return on investment from a financial perspective, but also a social impact perspective? What are the key pieces that are missing today, especially for standardizing loan products that can then be bundled together for secondary markets?

Cat Berman: We’re seeing an increasing interest in place-based investing. Strong numbers still matter. Metrics like affordable housing units financed or small businesses supported remain essential, but they’re not the full picture. Investors want to understand why this work matters and where their dollars are making a difference. Some of the most compelling reporting we are seeing and sharing includes “if not but for” impact — highlighting credit deserts and persistent capital gaps places where, but for impact investment, communities would not have access to the financial tools needed to thrive. To unlock more investment, especially from institutions looking to enter or scale in this space, we need to make the data easier to work with. We are driving efforts to standardize key elements in our reporting like impact themes, loan performance, and use of funds so investors can enter and scale in this space with greater confidence. Just as important, though, is normalizing the storytelling and the consistent, place-based narratives that bring the numbers to life.

P.C.: CDFIs — particularly loan funds — do not necessarily offer investors a competitive financial return but they do deliver an outsized “impact return.” The impact return is often assumed by investors that know the industry. The challenge has been in providing data that illustrates a CDFI’s ability to manage risk, provide a return and deliver promised impact. The data needs to be standardized, longitudinal and relevant with respect to how investors look at risk. Investors may need help understanding nonprofit financial statements, particularly how to assess the revenue structure of nonprofit CDFIs, the reliability of grant revenues and the ability of a CDFI to pare its expenses if future grants are not forthcoming. There’s a misperception that self-sufficiency–that is, the degree to which revenues earned from lending and related activities cover a CDFI’s expense load-–is a key indicator of a nonprofit CDFI’s financial strength. It is not, particularly for CDFIs that use government and private-sector grants to deliver support services for small businesses. CDFIs have demonstrated time and again that they can reign in expenses to match changes in grant revenue. The depth of a CDFI’s net asset base and the long-term performance of its loan portfolio are better measures of financial strength.

J.A.: To attract institutional capital and enable secondary markets, we need a baseline of consistency, both in how products are defined and in some of their structural features. Take small business loans. Today, that term can mean vastly different things depending on the lender. We need to create standardized definitions for loan types, borrower characteristics and core performance metrics so the ratings agencies, which institutional investors rely heavily on to inform credit quality, can make apples-to-apples comparisons across lenders and products.

At the same time, some standardization of loan product attributes — think minimum documentation, reporting fields or basic servicing standards — can make bundling and securitization feasible, without forcing CDFIs to abandon their flexible approach to underwriting and client service. This isn’t theoretical. Historically, the public sector has played a decisive role in setting these kinds of parameters to catalyze private investment. The Small Business Administration (SBA) program and the creation of the mortgage-backed security (MBS) market are clear examples of how government guardrails can establish investor confidence and unlock secondary market liquidity, while leaving room for lenders to serve their markets flexibly. The lesson is clear: Standardizing at the right level — not just at the reporting layer, but at some structural levels too — creates the conditions for scale, without erasing the local customization that makes CDFIs so effective.

On the impact side, investors ultimately want to know their money mattered. But we need to be honest: Money is the most fungible commodity in the world. Trying to draw a straight line between one investor dollar and one specific outcome oversimplifies how community development works. Impact takes years to measure, and outcomes are shaped by a complex web of factors far beyond any single loan. This is why many experienced CDFI practitioners lean on established bodies of academic research to guide their work. We know from decades of study that investing in affordable housing, small business growth and healthy food access drives long-term community outcomes. Every CDFI shouldn’t be expected to prove that with each investment. The key is to strike a balance. Improve impact reporting using place-based narratives and aggregated metrics, while also trusting the broader evidence base.

If investors want tightly attributable outcomes tied to their specific dollars, that’s a different model. It’s philanthropy, often accompanied by academic research funding and segregated funds, which means the investor does not get to benefit from the diversification of their investment into a broader pool of funds. In market-based investing, we need to embrace credible proxies and sector-level evidence, paired with narrative examples that help investors understand why their capital matters. Ultimately, investors need both: clear data and the stories that bring that data to life.

What is the opportunity to use data to show that community lenders’ balance sheets can absorb more capital (debt and/or equity) and remain healthy? What is the technical data and analysis needed to make that case?

P.C.: Aeris’ database of nearly 200 CDFI loan funds reflects prudent management of capital by most of these financial institutions. Their capacity to absorb more debt varies by the type of loans they originate and the markets they serve. In general, these CDFIs carry far greater ‘equity’ (in the form of net assets) than regulated depositories, which is one way to understand how CDFIs use their balance sheets to protect investors from the risk of loss. Historically, equity levels have ranged from 20% to 50% of a CDFIs’ total assets. That high level of ‘equity’ is justified given the greater risk CDFIs take on through their lending. In fact, one of the limiting factors in scaling CDFI lending is the need to continually grow that equity base by generating annual operating surpluses and by securing additional capital grants, which are used to leverage more debt for lending. If CDFIs could recycle their capital more quickly–through loan sales, for example–they may be able to scale more quickly. And of course, we need to consider a CDFI’s operational capacity and how much ability they have to expand staff capacity.

J.A.: Of course, standard financial metrics matter. Net asset ratios show the equity cushion a CDFI has to support additional debt. Debt service coverage ratios indicate whether current cash flow can support existing obligations and potentially more leverage. These are table stakes for any investor evaluating a lending institution. But here’s the critical point: Investors need to look beyond static ratios. They need to understand the trajectory of those numbers — how they’re moving over time — and whether those trends reflect a deliberate, well-executed strategy. A CDFI’s balance sheet might show increasing leverage or tightening margins, but is that a red flag, or part of an intentional growth strategy? Context matters.

This is where qualitative narrative meets quantitative data. If a CDFI is expanding into a new market or scaling a high-demand loan product, taking on more debt may be entirely prudent, even if the short-term trends look riskier on paper. What’s important is that the growth is intentional, supported by a credible strategy, and monitored against both financial and impact objectives. At the end of the day, investors don’t just want data — they want data with a story. Standardized financial ratios give the comparability, but understanding why those numbers are moving, and how they tie to mission-driven growth, is what builds investor confidence. The opportunity for CDFIs is to pair solid financial reporting with clear strategic narratives that help investors understand the why behind the numbers.

How much more capital can be unlocked for community lenders if we can successfully develop and scale secondary markets for CDFI loans? Who are the investors buying those loans today?

J.A.: It’s difficult to forecast exactly how much capital could be unlocked, but history offers compelling benchmarks. Take mortgage-backed securities. Before the MBS secondary market emerged in the early 1970s, U.S. mortgage originations were primarily balance-sheet-funded. Once pooling and securitization took hold, the MBS market exploded, increasing mortgage originations by five to 15 times, transforming localized, deposit-funded lending into a scalable capital markets-driven system, with over $8–$12 trillion in outstanding securities by the 2010s. Another is SBA 7(a) and 504 loan sales. Annual secondary market sales in 2024 were on the order of ~$20 billion, consisting of roughly $14–15 billion in 7(a) loan sales and around $5–6 billion in 504 loan sales. Before that market existed, originations were severely constrained. With secondary sales in play, outreach and capacity surged by 5–10x.

For CDFIs specifically, according to a May 2024 New York Fed study, CDFIs originated at least $67 billion in loans in 2022, up from $29 billion in 2018. Of that, $14 billion were sold into secondary markets — primarily residential loans, which again, speaks to how the mortgage market has benefited from standardization. In mortgage and SBA lending, secondary-market development drove multiples in origination capacity — 5x-15x in MBS and 5–10x in SBA guaranteed loans. CDFIs, however, operate within a market with natural affordability constraints. Assuming a conservative multiple of 3x to adjust for affordability constraints, originations could grow to $200 billion annually. While we understand the hesitation from CDFIs to trade off customization and flexibility for standardization, that is the impact opportunity we see. Tripling the amount of capital getting into communities would be a significant effort on moving the needle in access to capital. The data tell a clear story: With standardized loan definitions, transparent performance data, and product-level guardrails, secondary-market growth could unlock an additional $130B+ annually for community lenders. That’s capital that’s ready and waiting, if the infrastructure and investor-grade framework are built.

How do you not only develop common standards in an industry that is known for being very fragmented, but getting a critical mass to actually adopt them? What does that process of both development standards and getting organizations to implement them look like?

C.B.: At CNote, we’ve been focused on this challenge since day one. We knew that unlocking impact deposits and CDFI loan fund capital at scale would require standardized data asks and outputs across a highly fragmented industry. On the loan fund side, we partnered early with Opportunity Finance Network and Aeris to align with established best practices in CDFI data collection and measurement. We built our technology to embed those best practices, streamline data collection from community partners, and deliver consistent, comparable reporting for investors.

On the deposit side, we worked with CDBA, NBA and Inclusiv, with support from Mastercard’s Center for Inclusive Growth team, to build a shared reporting framework for mission-driven depositories. One of our strongest value propositions today is that these standards are simple, proven and time-tested. They have helped unlock hundreds of millions in impact-driven capital. We’ve seen a real domino effect as more CDFIs learn about and adopt this approach. And we’re still evolving. We continue to co-create with partners to ensure that our standards remain grounded in the operational realities of the field.

P.C.: That’s a tricky question. The CDFI loan fund sector has grown enormously in sophistication over the last 20 years. Financial reporting has become more standardized with the training and encouragement of trade associates and the work Aeris has done. But there is room for improvement when it comes to transaction-level data that conforms to the definitions used by the capital markets.The US Treasury’s CDFI Fund collects transaction-level data but it is limited to what they require for congressional reporting, rather than meeting the needs of investors. Most CDFIs collect data for their own use and for multiple stakeholders. These stakeholders range from foundations that provide capital and program grants, to banks that provide debt for lending, to government agencies that provide both grants and debt. Each of those stakeholders requires data that fits their specific objectives. As a result, CDFIs report a cornucopia of information. To complicate matters, some of the metrics may be called the same thing but are based on different definitions. CDFIs tell Aeris they wish stakeholders could agree on a set of common metrics, specifically for impact. The problem is, impact, like beauty, is in the eye of the beholder. We all want to understand impact through the theories of change that guide our work. And we all have our own specific theories of change. That makes it very difficult to standardize impact metrics. I think stakeholders need to compromise and reach agreements about the data they are willing to accept. And CDFIs will need incentives (and possible technology funding, in the case of smaller institutions) to adopt a set of common data standards. We have gotten closer with financial reporting. If and when loan sales become a more common practice and a secondary market emerges for those loans, I believe CDFIs will adapt. Some of the larger loan funds are already there.

J.A.: This is the classic challenge: How do you get a highly fragmented industry — one that prides itself on flexibility and customization — to align around common standards? You do it through infrastructure, incentives and collaboration. The CDFI sector is one of the most collegial industries I’ve worked with. Leaders are collaborative, open to sharing lessons learned and often willing to partner across organizations to get deals done. That’s a major strength. However, just being collaborative is not sufficient. History has shown that the public sector is critical in catalyzing secondary markets. For example, in the MBS market, government-sponsored enterprises like Fannie Mae and Freddie Mac set clear parameters for what could be pooled and securitized. Standardized documentation, uniform servicing standards and guaranteed payments were all public-sector constructs that built investor confidence. In SBA lending, the government didn’t tell banks how to lend, but it guaranteed a portion of loans and set standard eligibility, documentation and reporting criteria, creating the consistency needed for secondary market trading.

In both cases, the public sector played three critical roles: established structural guardrails (standard documentation, servicing protocols), offered incentives (guarantees, liquidity facilities) and built trust infrastructure (securitization platforms, clear disclosure frameworks).

This process didn’t erase lender diversity; it created the backbone for scaling it. In the CDFI sector, we need a similar approach, a public-private effort to design standardized data and reporting infrastructure, informed directly by CDFIs themselves. This isn’t about imposing standards from above — it’s about co-creating a framework that preserves what makes CDFIs unique at the borrower level, while enabling common reporting and pooling at the capital markets level. Achieving critical mass isn’t just a technical challenge, it’s a political one. We need a core group of CDFI leaders to step up and advocate for this next chapter. Standardization doesn’t mean losing identity; it means building the infrastructure to scale what makes CDFIs special. The blueprint exists. The collegial, collaborative nature of the industry means there’s an openness to come together to articulate what’s needed.

One barrier to adoption is investors often want to see how a new asset class performs over time before investing lots of capital. Is that a major barrier for driving investment to CDFIs, and what are ways to address that concern? Similarly, how do you develop common standards for risk, especially given that many loans are not backed by any collateral?

J.A.: There’s no doubt that investors want to see performance data over time before they commit significant capital to anything, regardless of whether it’s a familiar asset class, and certainly if it’s a new asset class. That is why having standardized reporting across organizations and across time is so critical. Without it, every investment feels bespoke, and institutional capital stays on the sidelines. The good news is that the asset classes and product structures already exist. We do not need to reinvent how an ETF, mutual fund or securitization works. Traditional markets have scaled these asset classes a million times over. What we are trying to do is to bring these tools to the community development space so that institutional investors can invest in community facilities and small businesses through these familiar products.

At present, we’re working to overcome data standardization challenges as we develop a small business loan ETF. To build any index, you need reliable, comparable data. That’s how every major investable index — from the S&P 500 to the Bloomberg Barclays Bond Index — was constructed: through standardized inputs, consistent definitions and uniform reporting requirements. Right now, CDFI lending lacks that common foundation. Each lender reports differently, defines loan types differently and tracks performance in its own way. Until we standardize those inputs, community lending remains difficult to scale as an investable product.

However, we’re having productive conversations with lenders who want to design their products for scaled impact. With an eye toward capital markets and getting rated, they want to learn about what metrics they need to track, reporting standards and key underwriting protocols that should be incorporated into their products and processes. As for risk standards, it’s important to push back on a common misconception: Many CDFIs do engage in collateral-backed lending — whether in affordable housing, commercial real estate, or community facilities. However, as the economy evolves to become more service-driven, knowledge-based and tech-enabled, both CDFIs and the broader lending industry are increasingly financing businesses where collateral isn’t as clear-cut — think professional services, software startups, transportation with mobile assets, or community-based service providers.

The real challenge is not just how CDFIs assess risk, but how the lending industry as a whole adapts its risk frameworks to an economy where intellectual property and customer relationships are the primary assets.This requires two things: Segmented risk standards that reflect whether a loan is collateral-backed or cash flow-based, with appropriate adjustments in reporting and risk rating, and a coordinated point of view, across lenders, regulators, ratings agencies and investors, on what the future of the U.S. economy looks like and how to underwrite businesses operating in that future.

Developing common standards for risk isn’t just a problem for CDFIs — it’s a challenge the entire credit industry needs to tackle. For community lenders, standardizing borrower-level data, loan terms and portfolio performance metrics is the starting point. But the bigger opportunity is to help lead the conversation about how we assess risk in an economy that increasingly runs on people, knowledge and ideas, not just physical assets.

Does the current environment create a forcing mechanism for CDFIs to consider standards that would enable them to access secondary markets and new investors, or is it having the opposite effect in terms of having CDFIs retreat back into their historic focus on specific communities?

P.C.: On one hand, if capital access tightens for CDFIs, they may be inclined to develop or expand strategies that support loan sales to increase capital recycling. On the other hand, adverse economic conditions for their borrowers may require them to double down on the bespoke lending that they are known for in order to better support troubled borrowers. That could delay secondary market access in the near term.

J.A.: In our experience, the current climate absolutely acts as a forcing mechanism for CDFIs to engage more seriously with capital markets. The simple truth is that many of the traditional, reliable sources of funding that CDFIs have counted on — whether from government programs, bank partners or corporate philanthropy — are no longer guaranteed. At the same time, the general volatility of the macroeconomic environment has exposed a structural vulnerability. CDFIs often rely on a handful of capital profiles. When even one of those dries up, the institution can find itself facing existential risk. This isn’t in tension with their mission. It’s because CDFIs are committed to their communities that they need to diversify their capital base. Accessing scalable, diversified capital is not mission drift; it’s mission enablement. If we want CDFIs to continue making capital accessible for all borrowers, we need to equip them with the financial tools to do so sustainably.

The industry needs to see the forest for the trees. Engaging with capital markets, adopting standards and building market infrastructure isn’t about turning community lenders into Wall Street banks. It’s about building the plumbing that will allow them to serve far more people, far more effectively, for decades to come. Capital markets should be seen as the engine to address the masses. Philanthropy and catalytic capital could partner with public sector actors to fund the R&D — the tools, the platforms, and the tweaks that let CDFIs maintain their relational, community-focused value proposition while tapping into scalable financial infrastructure.

We hope this moment of uncertainty and distress becomes an inflection point towards resilience and scale. This moment isn’t about retreating into traditional models. It’s about modernizing how CDFIs finance their mission. Capital markets and standardized data aren’t distractions — they’re the pathway to scale.

Looking forward, what gives you hope about the future state of small businesses in the U.S., and specifically our ability to use data to attract more capital and provide better support?

J.A.: The people doing the work. Every day, we see CDFI leaders and their teams showing up with a level of commitment that’s hard to overstate. Many of these leaders didn’t come from finance. They came to this work because they wanted to make a difference in their communities, and over time, they realized what we all eventually learn: Capital is absolutely necessary for driving impact.

I’m especially encouraged by the intellectual honesty I see across the sector. CDFI leaders are right to interrogate the impacts of capital and financial systems — after all, these systems have often failed or excluded the communities they serve. But these same leaders are also the ones who recognize that, for all its flaws, capital must be part of the solution. They’re not afraid to wrestle with that tension. That’s leadership.

Now, we’re at another inflection point — a moment where we have the opportunity to scale that commitment. With the right data infrastructure, with standardized reporting and investor-grade transparency, we can channel significantly more capital to the communities that need it most. Not at the expense of the mission, but in service of it.

My hope is that we don’t let this moment become one of retrenchment or contraction. Let’s not treat capital markets as the enemy. Let’s continue doing what this industry has always done in moments of challenge: collaborate, innovate and pursue an ambitious vision of scaling capital for all communities. Because at the end of the day, it’s not about capital for capital’s sake. It’s about what capital enables: businesses opened, homes financed, communities strengthened. And that’s what the people in this industry are working for every day.

P.C.: We have seen firsthand that as investors become more familiar with CDFIs and their track record as prudent stewards of capital, they are more open to providing capital to CDFIs to support small business and other community-based lending. That increase in familiarity is the result of great communications about the industry, the availability of reliable longitudinal performance data, and insights about how to interpret that data on these unique financial institutions.

C.B.: Every day, I meet an inspiring entrepreneur who, against all odds, turned their idea into reality. And we, the local community, get to benefit from that vision and be on board for their entrepreneurial journey. At the same time, most entrepreneurs don’t go into business to perfect a P&L. So I believe that those of us working in finance — and particularly impact investing — need to commit to making small business owners’ access to capital easier, more seamless, and more repeatable. The more we unlock data about how entrepreneurs use capital, need capital, and leverage capital for what are often overlooked community impact outcomes, the more we can galvanize individuals and institutions to do what is at the heart of finance: Invest in one another.

Sandy Fernandez is vice president of North America for social impact at the Mastercard Center for Inclusive Growth and head of the Mastercard Strive USA program.

This article is part of Mastercard Strive USA’s ‘Six Shifts’ small business support series, which highlights how ecosystem leaders are putting strategy into action to improve small business outcomes — from capital and tech to timing, data, and trust.

Want to learn more or connect directly? Reach out to us at striveusa@mastercard.com.

You can also see a summary of the ‘Six Shifts’ on this fact sheet or learn more about Mastercard Strive USA’s impact in this snapshot about our partners and work.