New loan will provide low-income women with capital to grow their businesses

We are pleased to announce a new Program-Related Investment (PRI) in Grameen America’s Bay Area program. Pooling our $800,000 loan with other sources of capital, Grameen America aims to lend $38 million to 4,000 women entrepreneurs in the Bay Area over the next five years.

Grameen’s micro-loans help low-income women expand their businesses, increase income, and build credit. Their group lending model provides capital, along with financial education and social support to help first-time borrowers build a credit history, establish a savings account, and learn alongside other small business owners. Grameen fills an important niche in small business lending by supporting clients who lack both the collateral and internet access often required by lenders.

How does Grameen’s model work? A mother with a small flower business can take her first loan – typically $1,300 for six months – to buy a refrigerator, allowing her to purchase flowers in bulk and increase her profit margin. Grameen’s staff work closely with her, establishing a payment schedule, opening a savings account, and facilitating meetings between her and similar borrowers. Having successfully repaid this loan, she can borrow up to 20% more for a slightly longer term, eventually borrowing as much as $15,000 as her business grows. Along the way, she establishes a savings account and credit history, while increasing her family’s income, and in some cases, employing another person.

Founded in New York in 2008, Grameen America’s mission is to fight poverty by helping women to increase family income. Grameen America has been active in the Bay Area since opening their Oakland office in 2012, with support from The San Francisco Foundation. By December 2014, they had nearly 3,000 borrowers and had lent over $11 million. Currently about 90% of their borrowers are Spanish-speaking- micro-entrepreneurs. They boast a repayment rate of 99%, due in a large part to their high-touch model.

In partnership with our donors, we are proud to support Grameen America’s efforts to create economic opportunity for low-income women in communities like Oakland, Richmond, Fremont, Hayward, Newark and San Francisco.

Learn more about our Program-Related Investment Fund and our current portfolio of loans at sff.org/pri.

 

Learn more about the Program Related Investment Fund and other borrowers making a transformative impact in the Bay Area.

See more PRI-related posts:

New $500K Loan to Anchor Critical Services in Downtown Oakland

Successful Partnership Leverages $21.M for Bay Area Projects

A (Delicious) Return on Investment

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