Partnership to Help Maine Immigrants Get Interest-Free Business Loans

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Deborah Bafongo started her Angels of Love Event Design business in South Portland in 2019 without any outside loans or grants.

Bafongo specializes in decorating formal events, especially weddings, and hoped she could handle enough weddings in 2020 to get her money back on equipment. However, when the pandemic broke and weddings were canceled en masse, Bafongo needed more help to keep her business afloat.

From a mutual friend, she learned about a program offered by the Greater Portland Immigrant Admissions Center, which provides interest-free loans to business owners like her. Bafongo, who immigrated from the Democratic Republic of Congo in 2014 and lives in South Portland, received a loan of $ 2,500 with a maturity of 21 months. She plans to use the funds to purchase a larger storage facility that will be used as a showroom for her designs, as well as additional equipment.

“I really needed funds,” she said. “As an immigrant, I am very grateful that this platform has helped us succeed in our careers. … At that moment (due to the pandemic) I really needed something from somewhere to help me. “

INNOVATIVE PARTNERSHIP

Bafongo’s business funding is the result of a partnership between DreamxAmerica, or DxA, a national initiative that brings together storytelling and support to immigrant communities founded by Andrew Leon Hannah in 2018 – and Kiva, a non-profit organization that allows people to lend money online.

DxA released the storytelling component of its project, a documentary featuring three North Carolina immigrant entrepreneurs, in November 2020. When it came time to begin work on the impact assessment of the DxA project, Hannah reached out to Rohit Agarwal, Kiva USA Program Manager and Liaison. ever since they both worked at global consulting firm McKinsey & Company to form a partnership that could provide funding for immigrant business owners.

Immigrant entrepreneurs can face challenges in accessing traditional bank loans – sometimes due to a lack of credit history in the United States, and sometimes due to racial or cultural discrimination.

“Often the banking system does not treat low-income minority immigrants the way it should,” Hannah said. “Sometimes there is a lot of mistrust, and sometimes there are unfair assessments. … We appreciate Kiva for being very clean, very simple. There are no research fees or other hidden fees. These are zero percentages, zero commissions. “

DxA partners with four local organizations at the national level, including the Welcome Center, that advertise loan opportunities and support business owners throughout the application process. DxA staff edit the applications to tell their stories more succinctly to attract as many lenders as possible, and the Kiva team reads the formal applications and determines the loan amount the business can apply for. DxA then promotes the borrower’s profile to the business owner until the loan is fully funded.

Agarwal said local organizations that DxA partners with are critical to building confidence in the Kiva loan program.

“The main way for us to build trust – and in many of these communities, there is rightly a decent distrust of traditional financial institutions – is through trusted local partners,” Agarwal said. “And here comes DreamxAmerica, which I think has done a fantastic job of building trust through the immigrant reception centers (and) through various other intermediaries to say, ‘Hey, here’s a good source of capital, with zero commission and zero interest.”

These local organizations often already have strong partnerships with immigrant business owners and can act as reliable intermediaries.

“Most immigrant small business entrepreneurs are not going to just go to the Kiva website and say, ‘Oh, this looks good,’” Hannah said. “You need someone to vouch for this.”

Navid Ahadzadeh, recipient of an interest-free $ 8,500 loan for his Casco business, Scratch Master Mobile’s traveling auto repair shop, used part of the loan to buy a new van. Derek Davis / Staff Photographer

IMMIGRANT ENTREPRENEURS

The Welcome Center, which was founded in 2017, plays this role in Maine, connecting immigrant business owners with a variety of sources of capital.

“Research shows that nationally immigrants are more likely to start businesses and small businesses than Native Americans,” said Reza Jalali, executive director of the center. “By doing this, (business owners) create jobs not only for themselves, but for other members of the community as well. Part of what we do in the business center is helping immigrants access finance and then helping them find creditors. “

Still, seven business owners in Maine the loans were fully funded through a dedicated DxA-Kiva initiative and two more are still in the funding process.

Navid Ahadzade, founder and owner of Scratch Master Mobile, a mobile car repair service based in Casco, knew Jalali through the local Iranian immigrant community and successfully applied for a $ 8,500 loan to expand his business. He used part of the loan to buy a new van.

“Since my business is a mobile business and (because of) my old van, my options were limited,” Ahadzade said. “So when I get a bigger van, it (will) be more reliable, more professional. It will look professional. “

Ahadzadeh moved to the United States in 2009 from Sari, Iran due to persecution in his home country that limited his career opportunities.

“I am Bahá’ís and Bahá’ís are a very persecuted religious minority in Iran,” Ahadzade said. “Bahá’ís in Iran are not eligible for higher education and many Bahá’í-owned businesses are being closed by the government. So knowing that people in other countries are helping you get a loan and everything else makes me very happy. “

USEFUL FOR MUSLIMS

Interest-free loans not only help immigrants with limited access to capital, but also have religious significance for many. Traditionally, Islamic law prohibits the payment of interest on loans, prompting many Muslim immigrant business owners to seek loans from other sources other than traditional banks. This was the case with Hamza Khan, founder of Inclusion Maine, a diversity, equity and inclusion consultancy based in Westbrook. He received a loan of $ 6,500.

Humza Khan

“In this program, I was interested in the interest-free component,” said Khan, who was born in Pakistan but grew up mainly in Maine. “I could obviously go to … anyone can go to the bank, or they can go to venture capital, they can go and raise money … but for me, really for religious reasons, I wanted to avoid interest.”

“(With a loan) I can invest in what I’m working on and pay for it over a period of time while respecting (my) religious beliefs,” Khan added. “That’s what drew me to this program compared to the more traditional option.”

Khan used some of the funds to pay for additional advertising, but his main goal is to host the conference.

“One of the things I hope to focus on is the Diversity and Inclusion Conference,” Khan said. “So we are focused on bringing people together who are interested in this work, and on learning about local problems, how we can solve them and what works. … I hope the (conference) won’t be too costly for the people, so this loan will certainly help me start making this possible. It has already helped. “

For Jalali, the program is also a valuable indicator of the opportunities available to immigrants in Maine.

“Investing money in the state is always good news and support for our new neighbors who have been displaced by war, hunger and persecution,” Jalali said. “So it’s good for Maine in the state where we are dealing with an aging workforce. We need more immigrants, and can (this program) be one of the ways to attract new immigrants?

“Could this be the way that some immigrants in Vermont, New Hampshire, Massachusetts will look to Maine and say, ‘Well, this is a great state to go and start a business? “It will be really good for us in the long term as we attract more businesses (and) more young people (who are) qualified, educated and motivated to come and add to the wealth of our community.”



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