View Overview of the Project
The Capital Good Fund
Vision: To enable the poor to lift themselves out of poverty through individual empowerment and a banking system grounded in social innovation and environmental sustainability.
There are two fundamental components to our vision. The first is to empower the poor to lift themselves out of poverty by extending affordable capital to them. The second is to create a new model for banking wherein the bottom line is as much defined by social equity and environmental sustainability as by financial returns. Given the tremendous success of Grameen Bank, and the publicity given to micro-credit as a result of Muhammad Yunus receiving the 2006 Nobel Peace Prize for founding Grameen, one would think that micro-credit would have taken off in the U.S. as well. After all, America has a 17% poverty rate despite being the wealthiest country in the world. However, our research has indicated that there is not a single U.S. micro-credit initiative that has reached scale, and the largest one only gives out 1,300 loans a year. All this leaves room for us to innovate and find a way to make micro-finance reach more people more effectively.
What’s more, given the recent turmoil in the financial industry, there is no better time than now to have a conversation about the philosophical, legal and social underpinnings of our banking system. But beyond that conversation, we want to create a new model for banking by becoming a Community Development Financial Institution (CDFI) that changes how people think about banks and their impact on society.
Mission: To extend credit to low income Americans not conventionally considered credit worthy through micro loans, with an emphasis on the concept of social collateral; to invest in projects with social and sustainable aims; and to create a sound option for socially minded investors looking for a secure investment in the social good.
Strategy: We will begin by providing loans to cover the cost of becoming a legal resident or citizen. In addition, we will disperse loans to low-income entrepreneurs who have graduated from a business training program given by one of our community partners, or who otherwise can demonstrate the requisite knowledge and skills to succeed in business. As we expand we will begin accepting deposits, providing loans for green urban revitalization projects, and moving towards CDFI status.