GA Blog HomeGA Blog Grameen America Comes to Omaha: Part I
Grameen America Comes to Omaha: Part I
Written by Jenene Allison
on Monday, 08 June 2009
In early 2008 when Grameen America opened its first branch in Queens, New York, many people asked, “Why bother with microfinance in America?” Since then the Queens branch has lent more than $1.6 million to over 600 poor women in a neighborhood with a distinctive immigrant community, and the organization is now expanding to Omaha, Nebraska.
Areas of high poverty are usually very well-defined parts of town. While some areas of Nebraska have poverty rates as low as 4%, in other parts the rate reaches as high as 25%. With this in mind, Grameen America is starting in South Omaha, with plans to expand to North Omaha later. Branch Manager Habibur (Habib) Chowdhury has just hired his first associate, Patrick Laird, who formerly worked at the Phoenix House domestic violence shelter.
“I would like to have more staff recruited by now,” Chowdhury says, “But this is a good start. Patrick is very interested in Grameen and I have started staff orientation with him. We are also telling people that we are ready to start making loans.”
The Grameen lending model relies on community- and relationship-building rather than just handing over a check. Unlike a traditional American banker, a Grameen America banker goes to the borrowers. This connection between banker and borrowers helps to ensure the remarkable 98% repayment rate—before a borrower gets into trouble, her peers and her banker know about the problem and can offer ways to help.
The average size of first time loans from Grameen America are about $1,500 to $2,000. With a successful repayment history a woman can borrow more. But to start a woman must find four peers or friends who also want to borrow money to support a small business. The group of five meets weekly and gives each other mutual support as they use their microloans for entrepreneurial, income-generating activities. Each Grameen America Bank Branch is led by an experienced senior manager such as Chowdhury. The manager starts by immersing him or herself in the local culture rather than current interest rates.
Chowdhury began his journey to Omaha by spending 1 month observing the Grameen America branch in the Jackson Heights neighborhood in Queens. Then in April he traveled to Omaha.
Chowdhury has been managing Grameen microcredit programs since 1985. In 2000, he launched and managed a Grameen microcredit program in Kosovo to provide credit to war victims, widows, and displaced women. When Chowdhury arrived in Kosovo in 2000, local people were skeptical about microfinance. Today the program has over 6,500 borrowers and is growing.
While he encountered many challenges bringing the Grameen microlending model to Kosovo, there were also advantages. “In Kosovo, we could go directly to the village elder, and he would introduce us to the rest of the village,” Chowdhury says.
In Omaha there are no elders, which means more travel and more networking. “Omaha is very spread out and there is no public transportation,” Chowdhury says. As a result, Grameen America is renting a car that he and Laird will share. Local resident and United Way employee Julie Kalkowski has also been helping Chowdhury find his way around the city and connecting him to useful organization and churches.
Besides the United Way, Chowdhury and Laird have already reached out to local community-based organizations the Latino Development Corporation, Catholic Charities, the South Omaha Community Care Council, the Center for Women Entrepreneurs, among others in order to understand the community and to build support for Grameen. Chowdhury hopes to build a panel with representatives from these different groups in order to make it easier to recruit new staff and borrowers.
“Our message is always very simple,” Chowdhury says. “We give examples from Grameen and its success all over the world. We explain that Grameen America is new for Omaha, but has already had success in New York.” When they find willing listeners, Chowdhury and Laird can also assure them that they won’t need to find their way to Grameen America’s offices to get things started. “We give them our business cards and our flyers and we tell them we will come to their community,” he says.
In his first year, Chowdhury hopes the group will hire six more staff, reach 700 borrowers, and disperse $1.3 million in small loans. “Then, we will try to open a new branch in North Omaha,” he says.
Grameen America has arrived in the Cornhusker State—and at a critical moment in the economic crisis. As state budgets are cut, and lawmakers quibble over how to help those in need, there is more need and fewer resources. According to the blog Poverty in America : “now more than ever we need people who see a problem, roll up their sleeves, and get to work. If we can't count on government... then we'll have to help each other."
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Comments
KANEKO, Open Space for Your Mi said
We applaud the work of Grameen America in Omaha. We have several individuals coming to Omaha for our Great Minds Series who are innovative journalists and social activists from around the world who have worked with and launched similar microloan programs. Our upcoming events might provide exposure for Grameen America in Omaha?
