Grameen America: Bringing Microfinance to the U.S.

Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance Are Changing the World. Recently I had the pleasure of visiting our sister organization, Grameen America, which has been providing microfinance services to low-income, mostly Hispanic clients in New York since 2008, and has since opened branches in Omaha and Indianapolis.  My host was GA’s CEO of Operations, Shah Newaz, someone I have known for more than 20 years. When I first arrived in Bangladesh, Shah was head of Grameen Bank’s audio-visual unit, and later became the longest-serving zonal manager in the bank’s history.  (A zonal manager is the most senior field-based position in Grameen Bank’s structure.)  Some years after that, he served as a senior technical consultant for Grameen Foundation in the Dominican Republic, where he did a great job and picked up some Spanish (which he has continued to perfect in his new role).

Alex Counts attends a Grameen America center meeting in Jackson Heights, NY. (Photo by H.A. Shah Newaz.)

I was interested in how GA was progressing for a lot of reasons.  My book Small Loans, Big Dreams extensively examined one of the earliest microfinance programs in the United States, the Full Circle Fund.  While doing that research, my eyes were opened for the first time to the vibrancy of the grassroots economy in many inner-cities.  Later, I became involved in microfinance institutions in the United States that Grameen Foundation also supported: Project Enterprise in New York City, the PLAN Fund in Dallas and the New Opportunities program of Volunteers of America in Los Angeles.  Though the LA program was phased out, the other two continue providing microfinance effectively while drawing on the Grameen Bank model extensively.  However, they operate on a relatively small scale, even as they try to serve a lower-income population (including many African-Americans) than other microfinance and microenterprise programs here serve.

Grameen America today has 7,000 clients, almost half of whom are served by its original branch in Queens – a modest one-room space in a neighborhood where one can find store signboards with writing in English, Spanish, Hindi, Bengali, Arabic and Korean.  The scale of operations outpaces virtually every other MFI in the United States.  It was exciting to sit in their office one recent afternoon and see how smoothly everything was proceeding – half-dozen center managers had each attended between three and five meetings, as they do every weekday, and by 1 p.m. the office was filling up with clients who were coming for their loans, which are renewed every six months if prior loans are paid on time (as almost all are). It turns out that most centers are populated by people from the same Latin American country – all except one woman in the center I visited was from Mexico (the lone exception was from Ecuador).  Others are dominated by Dominicans or Guatemalans, while some are fairly mixed.  Most of the businesses are related to food (pushcart, catering, etc.), clothing and other retail (such as flowers).  About eight of the women in the center I visited – which had about 30 members attending – were involved in a kind of direct-selling network for nutrition products*. 

Sabrina Dominguez shows Alex Counts her flower business. (Photo by H.A. Shah Newaz.)

When I talked with Shah Newaz and his Bangladeshi colleague Shah Alam, I was able not only to practice my Bengali – still holding up fairly well after all these years! – but also see how remarkably well the Grameen II methodology has transferred to the urban United States.  Shah Newaz sees great potential to expand in the New York area and nationwide.  He referred to the landscape as “maath khali” (open field), which means there is great demand and virtually no competition (especially for the lower-income segment, who need loans as small as $1,500) – much as it was in Bangladesh in the early 1980s, when he was starting his career with Grameen Bank.  The only barriers involve getting visas for Bangladeshis to serve as branch managers (local people, mostly recent college graduates, serve in the other roles) and raising the start-up capital for the branches they want to open. As I was leaving, I gave Shah Newaz the traditional Bangladeshi embrace and noticed that a reporter from a major magazine was settling in for an interview.  Clearly, people are taking notice of this success story – I am eager to see how it unfolds from here.

*original post has been updated to avoid implying any endorsement of multi-level marketing networks.