Food Systems Financing Action Plan

Food insecurity is a well-documented issue in Virginia and throughout the United States. Food enterprises, especially those in under-resourced communities, often lack access to the credit needed to start or expand their operations due to the narrow profit margins of food enterprises. Community development financial institutions (CDFIs), such as Virginia Community Capital (VCC) address this issue by providing low-interest financing to food businesses that can increase food security and strengthen local economies. Food systems financing is a developing field for VCC and other CDFIs, and changes to standard practices are required to ensure that lending is as accessible as possible while maximizing community impact and maintaining financial solvency. This plan begins with a review of relevant literature on food security, food justice, and the role of CDFIs. This is followed by an analysis of existing conditions as they relate to food security in Virginia, with an emphasis on the relationships between race, poverty, and food security. Key findings were made during semi-structured interviews with representatives of CDFIs offering food systems financing, individuals operating food enterprises, and those studying food security in academic settings. Research findings highlighted the need for CDFIs to build trust with borrowers, the high externalized costs of existing food systems, and the potential impacts of targeted investments across the food value chain. These findings informed recommendations for VCC’s food systems financing practices, which include continuing to eliminate barriers for prospective borrowers, coordinating efforts across the healthy food network, and making connections between food and other lending areas