By Jeremy Walsh
Grameen Bank, the microlending organization founded in Bangladesh in 1976 by 2006 Nobel laureate Mohammad Yunus, has set up shop in the neighborhood.Grameen America, an offshoot of Grameen Bank, opened its pioneer branch in November in a heavily South Asian area on 74th Street. It made its first loans in January, said Noor Shams, project manager for Grameen America.”Being located in Jackson Heights, Queens, allows Grameen America staff to easily reach out to a large and diverse community which is highly entrepreneurial,” she said.Grameen America offers clients – mostly immigrant women with poor or no credit – small loans, usually for business ventures. The amount may be as small as $500. The average amount is between $1,000 and $3,000, Shams said.Clients typically use the money for minor expansions, such as a new sewing machine for a tailoring business, Shams said.New York City was a natural choice for Grameen because the city is home to many immigrants, some of whom live below the poverty line, she said.Generally, she said, the only other organizations targeting poor and immigrant communities are check-cashing and payday lending companies (what are these?), which often charge high interest rates that cripple those who take out loans.A 2006 report from the North Carolina-based nonprofit research group Center for Responsible Lending showed that interest rates for payday loans can be as high as 400 percent, and the typical loan recipient pays back $793 for a $325 loan. The research group criticized payday lenders for trapping clients in a debt cycle by demanding repayment within two weeks.Grameen America is not the first microlender to take the practice to the United States. Accion New York, the largest microlender in the United States, has loaned $70.2 million to more than 10,000 clients across the country since it started in 1991.Like Accion, Grameen America plans to begin expanding gradually across the United States. Among the areas currently under study are Arkansas, Louisiana, Nebraska, Florida and California, Shams said.Reach reporter Jeremy Walsh by e-mail at jwalsh@timesledger.com or by phone at 718-229-0300, Ext. 154.
