DURHAM, N.C.–Self-Help Credit Union has partnered with a program aimed at assisting women- and minority-owned small businesses.
Self-Help Credit Union is providing access to microloans up to $15,000 through Kiva Piedmont North Carolina, a microfinancing platform that connects lenders and borrowers through crowdfunding. The interest- and fee-free loans can be as small as $1,000 and include a three-month grace period.
According to the Charlotte Business Journal, the cities of Statesville and Salisbury in North Carolina have agreed to award matching grants to borrowers — Salisbury at a $60,000 commitment and Statesville still in discussions. Livingstone College, a Salisbury-based historically Black college, is another partner in building the program.
Claudie Johnson, Charlotte city executive at Self-Help, told the Charlotte Business Journal discussions related to a partnership began more than a year ago right as COVID-19 started to spread. Johnson said the credit union and Salisbury leaders discussed ways to help small businesses that didn't qualify for the federal Paycheck Protection Program, for example.
$25,000 Minimum
"Our minimum loan for small businesses is $25,000, which is fairly low compared to other banks, but we still were running into situations where folks were just looking to borrow $2,500, $5,000, $10,000," Johnson told the publication.
According to the Business Journal, Self-Help CU will help borrowers gather the documents they need before officially submitting the applications to Kiva. Johnson said there is no set number of businesses this program seeks to help. About 40 to 50 minority-owned businesses in Salisbury have already been identified as potential borrowers, the Business Journal reported.
This is Kiva's first hub in the Carolinas, Anne Lufkin, strategic partnerships manager for Kiva U.S., told the Business Journal. Self-Help is also its first credit union partner.
Four-Million Borrowers
Kiva is a San Francisco-based firm that works across nearly 80 countries. It has roughly four-million borrowers and two-million lenders on its platform. The platform has helped fund more than $1.5 billion in loans, according to its website, the Business Journal stated. Lufkin told the publication Kiva is an entrepreneur's first capital step — its lending is not based on credit scores or collateral. Most borrowers would not qualify at other financial institutions, the report added.
Self-Help told the Business Journal it also brings in a technical assistance component, a hallmark for many community development financial institutions, or CDFIs.