View Vision Mission and Strategy
Vision: A world in which all entrepreneurs all able to realize their dreams and the working poor can lift themselves out of poverty thanks to affordable financial services and products.
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 establish a new model for banking in the U.S. 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, it is imperative that as a society we consider the philosophical, legal and social underpinnings of our banking system.
Looking forward, we want to actually 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. CDFI�s work in areas that are underserved by traditional banks, including micro-loans for low-income entrepreneurs, loans for environmentally responsible development, and technical assistance and capital for community facilities.
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�the use of social pressure, as opposed to traditional collateral, to ensure high re-payment rates; 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. These loans will enable the borrower to increase income and re-pay the loan through: access to the Earned Income Tax Credit, which is worth up to $4,100 a year; better access to jobs; ability to legally own property, etc. 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.
Rather than taking a �hands-off� approach once the loan is made, for both the business and legal status loans we will connect the borrowers with volunteers and other organizations to work with them on financial literacy, business and life planning, tax preparations and other critical needs.
Through focus groups, extensive conversations with community partners and other research, we have identified that there is a need in the community for loans with a reasonable interest rate and flexible requirements with respect to credit history and collateral. Finally, low-income residents of Providence are less likely to have access to a bank account and more likely to be affected by predatory lending practices such as loan-sharking and payday loans than other Providence residents. In order to address those trends, and to help Providence continue its revitalization in a sustainable manner, our growth and expansion will lead us to begin accepting deposits, providing loans for green development, and moving towards CDFI status.