By Ana Milena Varon
LOS ANGELES – As if it were a sacred ritual, every week Gloria Sanchez meets to talk business with four other Hispanic women who are on their way to entrepreneurship thanks to the system of microloans.
“I never thought that anyone would believe in me and help me get out of the tough situation I was in – I only needed them to believe in me,” Sanchez, a Mexican immigrant, told Efe.
Sanchez, like many who borrow from Grameen, the “village bank,” is a single mom. With five children to feed, the Mexican felt that fate had put her against the wall when she lost her job at a flower shop last year.
“I went to a neighbor to ask her to loan me $50 so I could buy some flowers and sell bouquet arrangements. I was desperate,” Sanchez, 47, said.
Though the neighbor was unable to lend Sanchez the money, she told her about the well-known “bank of the poor.” That was how the Mexican came to the little office that Grameen has in the mainly Hispanic Boyle Heights area of L.A.
In 2013, with only her eagerness to create a sustainable business as collateral, she received her first low-interest loan.
Bangladeshi economist Muhammad Yunus, winner of the 2006 Nobel Peace Prize, is behind this project which operates in a number of countries and which reached the United States in 2008.
“Poverty is not created by poor people, poverty is created by the circumstances created by the system – the financial system doesn’t work for low-income people,” Yunus told Efe.
According to the man known as the father of microcredits, the Grameen project initially included an equal proportion of men and women. But experience taught him that money brought into families by the women contributes more to the household’s prosperity.
“We think it’s better to get quick results for families, so we concentrated on the women,” he said.
The experience of Grameen America in Los Angeles shows that Yunus’s strategy works. Around 98 percent of borrowers make their payments on time and keep their businesses going.
“There are five of us in each group, with different businesses and ideas. Each one has a separate loan, but we all help each other get ahead, and we learned that discipline, unity and hard work are the keys to success,” the Salvadoran Celia Rivas, 42, said.
Rivas, who took charge of her two children with hardly any money after her divorce, always wanted to open a gymnasium, but her terrible credit history slammed the banking system’s doors on her.
Despite her troubles, Grameen America believed in her and loaned her $1,500, to be paid in 25 weeks. The immigrant now has taken out a loan for $5,000.
Grameen America has currently invested some $4.2 million in more than 2,000 small businesses run by women in Los Angeles.
The success of this program led the California Community Foundation to back this effort with funds that, in the long term, could reach more than $650 million.
“In Los Angeles County we have the highest concentration of immigrants, entrepreneurial people who come here in search of a better life. There’s no better laboratory for a microcredit program,” Antonia Hernandez, the foundation’s president, said.
“My goal is to qualify for another loan and gradually continue with my business with the hope that one day I’ll be able to open my own flower shop,” Sanchez said.