A Milestone for ‘Microloans’ in Queens
cityroom.blogs.nytimes.com
When Desiree Small handed carnations to Emily Medina, her banker, to thank her for helping to expand Ms. Small’s gift-basket business, the crowd in Jackson Heights, Queens, erupted with applause. “When’s the last time you bought your banker a bouquet of flowers?” asked Vidar Jorgensen, president of Grameen America, to more than 100 revelers who gathered over the weekend at Shangri-La, a restaurant in Jackson Heights.
The cause for celebration was the $1 million that Grameen America has dispersed to more than 380 borrowers since opening its doors in January. Its average loan size is $2,000; it claims a 99.5 percent repayment rate.
Grameen America’s branch in Jackson Heights is the first United States outpost of Grameen Bank of Bangladesh, which pioneered the concept of giving out “microloans” to entrepreneurs in Bangladesh. It has dispersed $7.4 billion throughout much of the developing world, and its founder, the economist Muhammad Yunus, was awarded the Nobel Peace Prize in 2006.
Many were initially skeptical about whether the bank’s group-lending model, which requires that its borrowers repay their loans at weekly meetings, would catch on. But after dispersing its first $1 million, Grameen America is now hoping to attract the attention of potential investors to expand its model from Queens to other boroughs — namely Brooklyn and the Bronx.
“Money is now the issue,” explained Shah Newaz, the general manager of the Jackson Heights office. Each new branch requires an infusion of $6 million to service up to 5,000 new borrowers. “If we have money, we can expand.”
In this way, Grameen is following in the footsteps of many other microfinance programs that have sought growth in the United States. Microfinance in the United States seems to face more barriers to expansion than in much of the developing world.
“Microenterprise programs have been around for a long time and have never succeeded in developing any critical scale in the U.S. in the last 15 years,” said Jennifer Tescher, who directs the Center for Financial Services Innovation, which promotes financial service access to people who do not use mainstream banking services. “The sheer logistics of setting up a small business in the U.S. are so radically different than setting one up in other third world countries,” she said.
No matter the challenge, Grameen is intent on expansion. And Brooklyn is next on its organizational horizon.
Already, Maura Johnson, a Grameen loan representative, has been trying to find recruits by stopping people on the streets of Bushwick. So far, one group of five members has been formed.
Over a buffet lunch of tandoori chicken and lo mein, Ms. Johnson, who had worked at a debt-collection agency for two years before joining Grameen, said she found her new job more rewarding.
Mr. Yunus, Grameen’s founder, addressed the gathering on Saturday.
“While the financial system is collapsing because people cannot pay back their loans, our borrowers are paying them back,” Mr. Yunus said. “While big clients have difficulty, our little clients, who live close to the economy, even in an environment of a meltdown, can be sustained.”
Francine LeFrak, a television producer and philanthropist, corralled a group of 20 friends and potential investors, who traveled by bus from Manhattan to Jackson Heights.
Ms. LeFrak walked away with an armful of goods she had bought from the borrowers’ mini-shops, displayed on tables for the occasion. “I’m taking Brazilian hand towels, Indian bracelets, T-shirts from Colombia and a sense of hope that someone from Bangladesh is investing in this country.”
Ken Belson contributed reporting. |
