Rural Development at Risk (Editorial)

Darrin Williams (right), CEO of Southern Bancorp Inc., visits with staff members (from left) Derrick D. Jackson, branch manager, and Seun Aiyese, head of retail at Southern’s branch on 12th Street in Little Rock. (Karen E. Segrave)

Last week’s article by Arkansas Business’ Griffin Coop underscores the need for state government to consider stepping into the breach as federal money for rural development faces elimination.

Coop wrote about the risk to community development financial institutions. These lenders provide capital to disadvantaged, often rural, communities. The Trump administration, however, says the Treasury’s CDFI Fund, which totals about $324 million this year, has been “abused to advance a partisan agenda” and has called for awards from the fund to be eliminated from the fiscal 2026 budget.

But in Arkansas, community development financial institutions — and these include some big lenders, like the $2.8 billion-asset Southern Bancorp — have previously had bipartisan support. And their focus has largely been on the economic development of Arkansas’ rural communities.

“We will see a widening of the capital gap between the needs for capital in rural places throughout Arkansas and the loans that banking institutions are able and willing to make in these places,” said Ines Polonius, CEO of Communities Unlimited, a CDFI that has lent money to local water and wastewater systems.

With the federal government’s focus on downsizing, the state’s general revenue surplus of $367.9 million in fiscal 2025 may come in handy.