Funding assists with the opening of innovative microlender’s first West Coast branch.
In an effort to support broad-based economic development in California, Chevron Corp. has committed $1 million to Grameen America, an innovative microfinance organization founded by Nobel Peace Prize laureate Muhammad Yunus.
The funds are intended to support the launch of Grameen America’s first West Coast branch in the San Francisco Bay Area by funding Grameen America’s operational costs.
Grameen America anticipates helping as many as 250 local borrowers and distributing more than $300,000 in microloans the first year of operation through its Bay Area branch. Grameen America will target low-income clients who cannot access traditional credit. A significant portion of Grameen America’s client base is low-income women. Grameen America has been successfully working in the U.S. since 2008. To date, they have funded 5,000 borrowers and lent out more than $13 million in microloans, averaging $1,500 each.
“The economic slowdown has made it especially difficult to secure funding for Bay Area small businesses and entrepreneurs, often a catalyst for job creation and economic growth for the state,” said Stephen Vogel, CEO of Grameen America. “Chevron’s support will help hundreds of entrepreneurs realize their dreams of starting their own businesses.”
Microlending meets a unique need in the Bay Area, where unemployment numbers made the second largest year-over-year increase in the nation. The Bay Area unemployment rate hovers at approximately 10%, according to the U.S. Bureau of Labor Statistics. Grameen America provides microloans to help aspiring entrepreneurs start or expand their small business, establish savings and develop credit by following the group lending and savings model that has been developed and refined over 30 years by the Grameen Bank in Bangladesh. Based on a peer-group system in which members encourage, support and learn from each other, the Grameen America model also incorporates asset building into all loan relationships so that members will build financial resources for the future.
“The success of our company is tied directly to the economic health of our community,” said Rhonda Zygocki, vice president of policy, government and public affairs for Chevron. “We believe Grameen will help create economic opportunities for people that wouldn’t exist otherwise.”
Today’s investment marks one of many that Chevron has made through the California Partnership, a Chevron initiative to invest in education and economic development in its home state. Through this initiative, Chevron has expanded and deepened its partnerships with more than 20 nonprofit organizations engaged in economic development and education around California. Since 2009, Chevron has committed $7 million each year through the California Partnership, increasing Chevron’s overall investment in the state to approximately $28 million year-over-year. Chevron has also partnered with Kiva.org and the Opportunity Fund to help support entrepreneurs in California and around the world.