Many Ways to Help Immigrant Businesses, Report Says
January 14, 2015. The Philadelphia Inquirer picked up on FPI’s report about immigrant Main Street business owners, which includes national data as well as case studies in Philadelphia, Minneapolis-St. Paul, and Nashville.
Immigrants who want to open a corner store, pay for a wedding, or buy a house often turn to a “lending circle.”
Called tandas in Latin America, susu in West Africa, and hui in China, they offer pooled-risk loans from informal groups with family honor as collateral.
Repayments don’t necessarily build creditworthiness, however, because transactions are not reported to credit bureaus.
Enter Finanta, a Kensington nonprofit with a hybrid twist on old-world tradition. As a community development financial institution, Finanta manages the lending circles of some immigrant groups by reporting transactions to the credit agencies, but retaining the risks of non-repayment within the small spheres of trust.
That’s just one innovation cited in “Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow,” a study to be released Wednesday by the New York-based Fiscal Policy Institute.