Square, the financial company known for its credit card readers, Cash payments app, and Square Capital lending program, announced that it would invest in an array of funds and lenders focused on underserved communities of color, as first reported in today’s DealBook newsletter. It joins a growing number of big businesses taking on racial economic inequality as a core part of its business.
Square promised to invest $100 million, or about 3 percent of the cash it held as of June, in four chunks. About $25 million will be deposited at Community Development Financial Institutions, or C.D.F.I.s, and Minority Depository Institutions, or M.D.I.s. By parking some of its cash with these firms. Square hopes to bolster their ability to lend in underserved communities.
About $50 million will be split evenly between The Keepers Fund, a vehicle meant to invest in M.D.I.s., and the Black Economic Development Fund, which was created to support Black-led banks and businesses. The remaining $25 million will be reserved for future programs.
Company executives planned expansion of that effort this summer when the plan took on new urgency as executives saw data on how badly Black communities were hurt by the pandemic. Amrita Ahuja, Square’s chief financial officer said that the move fit Square’s corporate mission of helping businesses grow through finance. “Part of the reason that Square exists is for this very purpose,” she said. “It’s not just doing good in the world, it’s good business, too.”