Silicon Valley Bank (SVB), through its Community Development Finance group, committed $1m in debt financing over the next three years to Grameen America, a not-for-profit microfinance organization that makes small loans to entrepreneurs living below the poverty line so they may start a business and begin to improve their financial situations.
The Grameen Bank was founded by Muhammad Yunus in Bangladesh in 1976. Yunus gained recognition worldwide when he and the Grameen Bank jointly received the 2006 Nobel Peace Prize. Grameen America launched in the U.S. in New York in 2008 with a mission to alleviate poverty and spur entrepreneurship by providing small loans, savings programs, credit establishment, and financial education to people living below the poverty line in the United States.
Currently, the organisation has more than 1,800 borrowers and plans to bring its microlending model to the Bay Area in 2010.
In addition to its first institutional commitment from Silicon Valley Bank, Grameen America is also seeking additional grants, loans and funding from local banks, foundations, and individuals.
Grameen America offers small loans to individuals who fall below the federal poverty line to start or expand a small business. In addition to making weekly loan payments including interest, borrowers are required to set aside a small amount each week in savings.
SVB’s Community Development Finance group, which is devoted primarily to affordable housing projects in Northern California, was formed in June 2002 and provides real estate developers with financing for multi-family and single family affordable housing projects in the Bay Area counties of Alameda, Napa, San Francisco, San Mateo, Santa Clara, and Sonoma. SVB’s Community Development Finance team targets projects where tenants earn between 30 and 60 percent of the area’s median income.
FinSMEs
07/01/2010