By Ellie Winninghoff

How do you develop a rural economy that is 90% covered with trees and includes 4,613 islands, but which has no major corporations, lousy soil and an inhospitable climate much of the year?

In l977, when Ron Phillips started Coastal Enterprises Inc., or CEI, a Wiscasset, Maine-based revolving loan fund and community development finance institution (CDFI) to support low-income people in Maine, the state was like a "third world country" based on natural resources and extractive industries with "less value-added than you'd like to see," he has said.

CEI currently has $792 million in assets under management and is one of the most sophisticated and pioneering impact investors in the country. Its do-good tentacles reach from Millinocket, Maine to Lopiwa, Hawaii Island.

With a focus on start-ups and small growing businesses, especially those involved in fisheries, farms and forestry, its triple bottom line innovations include things like FISHTAGS, which commit borrowers to collecting biological data in order to help manage sustainable fisheries.

CEI is also lauded for its StartSmart program, which has helped Somali refugees and immigrants to establish farms and a low-income farmers' market in Lewiston, as well as other businesses in the burgeoning Muslim communities in Lewiston and Portland.  

Loans range from less than $25,000 to more than $25 million, and like other community development finance institutions, CEI has a heavy emphasis on technical assistance to its borrowers. But it takes that a step further by developing a more holistic sector approach involving investments in production capacity, market opportunities, infrastructure, and policy development.    

"We pride ourselves on due diligence here, and we look at what needs to change to make proposals stronger," says Gray Harris, CEI's director of sustainable agriculture. "There is a commitment in this shop to have someone who can take the time to work with the people in [each of these sectors] to strengthen them so that they are viable sectors moving forward."

Accredited investors can participate in the fund's CEI Notes, which pay rates ranging from 2% to 3.5% for three to ten years. CEI is rated AAA-3 by CDFI Assessment and Rating Systems (, or CARS, and the minimum investment is $5,000. Recent investors have included the Ford, MacArthur, Kellogg, Kresge, Annie E. Casey and FB Heron foundations.

Working Waterfronts
Initially established to help add value in natural resource sectors, CEI made its first real mark in l979 with a $300,000 investment in Boothbay Region Fish & Storage Inc. The only refrigerated space available to local fishermen, it was slated for sale for tourist-related development after it burned. Saving "the Freezer," as it was called, became a community effort to preserve traditional livelihoods and the working waterfront, and it presaged some of CEI's heralded work to come.