BOSTON (CBS) — Massachusetts has begun a new initiative to encourage more loans to small businesses by earmarking a small portion of the state’s reserve funds to invest in community banks.
State Treasurer Steve Grossman says the funds, which will eventually amount to $300 million, will generate interest for the state and are all insured.READ MORE: Red Line Train Derails At Broadway MBTA Station
WBZ NewsRadio 1030’s Anthony Silva reports
Grossman says, “Community banks were the ones who stepped up their lending in the deepest, darkest days of the recession and they’re the ones who, I think, will lead us out of this by making capital available to small business.”
The first deposit of 5-million dollars was made at the Pentucket Bank in Haverhill Thursday morning.Â So far, 35 banks have signed up to participate.READ MORE: Andrea Campbell Seeking Commitments Before Endorsing Mayoral Candidate
Another $45 million was wired to nine other small banks, from Arlington to Ayer to Chicopee. Twenty-five additional banks have committed to participating.
The initial goal is to deposit $100 million of Treasury cash reserve funds typically held by large national and international financial institutions into Massachusetts-based banks.
Grossman says the program creates “jobs, opportunity, and prosperity.”
The first $5 million went to Pentucket Bank because bank President Scott Cole first brought the idea to Grossman.MORE NEWS: Inspired By Mother, NH Teacher Running Virtual Boston Marathon For Stepping Strong Center
(TM and Â© Copyright 2010 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)