BCN Staff — Aug. 23, 2021 — Local entrepreneurial service group Remix Ideas and Forge Community Loan Fund have partnered to create a pilot program to provide under-resourced entrepreneurs in Arkansas with microloans between $5,000 and $25,000 as well as free technical assistance.
The goal of the program, called the Imani Fund, is to minimize the systemic barrier in access to capital that under resourced entrepreneurs often face. Remix Ideas Founder Benito Lubazibwa added that he believes that access to capital is the key for businesses to survive, grow, and scale.
“Over the past few years, I have worked closely with Black entrepreneurs, and I’ve witnessed many of their business dreams die in the bank parking lot due to low credit scores and lack of collateral,” said Lubazibwa. “These economic redlines have denied under-resourced business far too long. So, I am excited that we are launching this innovative loan product which is rooted in equity.”
The Imani Fund, which means “faith” in Swahili, also uncommon underwriting process that assesses an individual’s character and community engagement rather than collateral to be considered for a loan. Another unique feature is that an individual’s potential to execute a viable business model in the future outweighs past relationship with personal debt.
Loans for entrepreneurs from the fund will be provided by FORGE, a local Community Development Financial Institution (CFDI) that is required under U.S. Treasury rules to provide at least 60% of its financing activities to one or more low- and moderate-income or underserve populations.
“Collateral, credit history, and personal capital are large features of the traditional underwriting process. These are prudent risk management assessments in lending. However, when they are paired with the historic extraction of wealth from underserved communities, the result is that these communities have been kept from traditional sources of capital,” said Forge Executive Director Philip Adams. “The opportunities and outcomes fostered through the Imani Fund should provide the larger financial system with a tool to pry open lending to a more inclusive future.”
Tim Turner, who owns Kingdom Made Treats with his wife, is the first recipient to be approved for a loan through the Imani Fund. According to Turner, the loan will be used for expansion and marketing costs to help scale the Italian ice business.
“This is our first commercial loan, so it is a milestone for us,” said Turner. “We want to build a legacy with the business—something for the next generation.”
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