It’s called the “local multiplier effect” – one dollar spent at a locally owned business will return seven times that amount within the community through city taxes, employees’ wages and purchase of materials and supplies at other independent businesses. The same effect can be seen in banking; when you bank at a local financial institution like Riverview Community Bank, your dollars stay at home, supporting Clark County. Here’s how you can make a difference when you bank locally:
Grow the local economy
Local banks might be smaller in size, but they are big players in fueling business expansion, preserving entrepreneurship and growing the job market. In 2012, Independent Community Bankers of America (ICBA) found that community banks funded nearly 60 percent of all small business loans, despite holding less than a quarter of the banking industry assets. That’s partially because, as small businesses themselves, local banks understand the various needs of small business owners. It’s also because, unlike at megabanks, local banks’ key decision-makers are readily accessible to their customers.
Keep decision-making local
A local bank not only means local decision-making, but also an intimate understanding of the local business climate, the political environment and the various trends influencing our everyday lives. Unlike national or regional banks, community banks are dedicated to channeling their loans to residents in the community. As fellow residents, community bankers have face-to-face relationships with their customers and are more willing to consider an applicant’s entire situation, often customizing loan programs that big banks can’t match.
Put your money to work
The primary activity of almost all local banks is to turn deposits into loans and other productive investments that help further the local community. Community banks are dedicated to investing in Main Street, keeping deposits and profits in the community to expand businesses, build homes and purchase goods. In contrast, deposits made at large financial institutions often fund out-of-area loans, hedge funds and international investments.
Back institutions that share a commitment to the community
If you’re still not sure of the impact banking locally can make on your community, consider this: Locally owned and operated banks not only reinvest profits into the local economy, but also set aside a significant portion of profits to donate to community organizations and non-profits that improve the communities in which we live. That’s because employees at all levels and board members alike are made up of local citizens dedicated to advancing the interests of the communities in which they live. With a commitment to community inherent in their structure, community banks take an active role in making their local communities a better place to live.
Local financial institutions work every day to support their customers, communities and local markets. From backing business expansion to supporting local nonprofits, local banks are rooted in the communities they serve. Chances are your community bank offers all the same services as larger financial institutions, but with unparalleled service and greater local economic impact. So next time you think about buying locally, consider taking the next step – bank locally – to ensure your money stays at work in your community. The decision to move your money may very well be one of the best decisions you ever make.
Jim Baldovin is the executive vice president of retail banking at Riverview Community Bank.
