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.