Improving communities, one women-owned business at a time

Capital One kicked off a campaign to support small business owners by providing educational programming and showcasing partner organizations that help new business owners get off the ground. One such organization is Grameen America. The group serves low-income women across the country by offering microloans to help them establish and build businesses so that they can support their families. While the organization can function on the small interest it receives from these loans, many larger corporations, including Capital One, provide grants to help Grameen America expand its reach. Since its launch in the Jackson Heights neighborhood in New York City in 2008, the nonprofit has expanded into nineteen branches in 12 cities, lending more than $600 million to more than 86,000 women.

So how was Grameen America able to become such a force in helping low-income women from diverse backgrounds start businesses? One Focus spoke with Alethia Mendez, Senior Director of Operations and Program Strategy at Grameen America and the group’s first employee at their Jackson Heights office in 2007, for her insight into how this exceptional nonprofit helps empower communities to build their own success.

Can you tell us a bit about Grameen America and how the program works?

Alethia Mendez: The focus of Grameen America is to provide small loans to low-income women to build their businesses and kind of develop their financial stability for higher family income, as well as being able to focus on the ability to invest and start a business, and/or continue in activities that they may already be doing.

To join, a woman needs to be living below the poverty line and use her micro loan to start and/or invest in an existing business activity that she has. She basically, then, will find four other women who she knows, is comfortable with and/or trusts, who are in relatively close proximity to her and who want to start their own business. These women will form a Grameen group. So, each group is made up of women who really know and trust each other. They're made up of their own people, kind of their own combination of a network, and it gives each of them a built-in support system.

Why did you choose to focus on women?

Alethia: Well, at Grameen America, we believe our women entrepreneurs are the greatest source of untapped potential for our economies and our communities. Shockingly, almost a decade after the recession, women and especially women of color, remain disproportionately excluded from the financial mainstream. So, what does that mean? It means more than one in eight women live in poverty. Women receive almost four percent of loan capital nationwide, and half of all women are unbanked or under-banked.

What are some of the challenges faced by the women you help and how do you work with them to solve those?

Alethia: I think there are unique challenges for each individual, but being an entrepreneur adds a whole other layer to balancing both personal and business challenges. What I think drives and contributes to the success of each person is having at least four other examples of women who, in spite of the challenges they face, can find ways to be successful, and they're able to share those practices amongst each other so that everyone learns the best approach.

We've proven that even with the introduction of digital banking and mobile technologies, there's still a need for traditional high-touch banking. Our ability to be able to reach out and touch and be face-to-face with our members on a weekly basis every single week—I think that adds a huge value of serving each one of them and really instilling this unprecedented trust.

This high-touch model also requires that all of our members meet weekly and that their group serves as a good peer-to-peer interaction. It's an opportunity for them to not only share information about themselves, but to learn, as well, from other members of the community and, more importantly, other entrepreneurs.

The foundation has clearly been successful considering the number of women you’ve been able to help. How do you make sure you have what you need to keep the mission going?

Alethia: I think the key to Grameen America being able to maintain and expand a steady growth in membership is definitely our staff and their ability to really connect with the women that we serve. That being said, Grameen also lends itself to following a sustainability model, which brings in the best parts of what the for-profit world or the for-profit types of institutions have: the ability to maintain and control our expenses in a way that will allow our source of revenue, which is interest income from the loans, to cover our expenses.

I think that's where the mission aspect of it is; it’s sufficient to be sustainable. This allows us to continue to find philanthropic sources of funding and other sources of funding to fuel innovation and technology and really impact the developmental aspect of our members.

Like the people you’re helping, you’re a woman in business. Has that given you a special connection to your work?

Alethia: I started at Grameen America pretty much at its inception. We disbursed our first loan in 2008, and I joined in December of 2007 when it was just a small little room and pretty much one or two other people here. At that time, I was only about 21 years old, just coming out of college, and, I think, innocently still looking at the world and trying to figure out what my place in the world was going to be. Knowing that I wanted to be a part of something that was going to help other people, it was pretty fitting that I fell into Grameen America.

I think over the last ten years I've learned a lot from working with the women that we do just because there are times where I, too, have struggled at trying to understand who I wanted to be or what I wanted to be. Being able to see examples from our members, such as one woman who was a hairdresser and wanted to run her own salon. She was also a single mom of three. I watched her try to figure out who she was going to be and who she was going to become and what that identity meant for her. That's something that goes far beyond loans and financial stability and being a member of a microfinance organization. It’s really understanding and seeing true examples of women who are trying to find their way.

And that is a lesson that I think I've directly gotten from having the pleasure of working with our women, of working with our members and being able to use their stories and even their struggles to really set the tone for the type of woman, the type of leader in the areas that I would like to focus. That ambition, that curiosity has really helped me personally and professionally grow and be in the position that I am here today at Grameen.