Executive Summary:

Grameen America (GAI) builds upon the revolutionary but simple idea that people can lift themselves out of poverty through their own entrepreneurial spirit. Since 2008, we have not only tested the microfinance model in different markets across the U.S. to prove its viability, but we also have the research that shows that our model can empower low-income women entrepreneurs in the U.S. to build better lives for themselves, their families, and their communities. Currently, there are 40 million people living in poverty in the U.S. Women are 38% more likely to be impoverished than men and more than half of low-income children live in female-headed households. By expanding our footprint to 14 more branches, we will reach 350,000 women entrepreneurs by 2026, have a material impact on poverty alleviation, and improve the economic situation of their spouses, children and employees, changing the lives of nearly 1 million Americans.

Challenge Statement

There are 40 million people living in poverty in the U.S., including 16 million women. More than half of low-income children live in female-headed households. Women entrepreneurs have the potential to serve as powerful economic engines, as additional income they generate and jobs they create through their businesses could transform their families and communities. However, many are shut out of the financial system due to poor credit and insufficient income: 30% of low-income consumers have no credit history and women entrepreneurs account for only 4% of all conventional small business loans. Women entrepreneurs remain an untapped resource since small loans are costly and complicated for private banks to administer, and the public sector does not have the means to do so. Stepping in to solve a problem that neither the public sector nor the formal banking system can address, GAI invests in the entrepreneurial spirit of women living below the poverty line. Our average borrower is 40 years old with no higher education degree, is self-employed with an average of three children and has no formal credit or loan history. Many of our members are single heads of household who work over 35 hours a week. We provide our members with access to capital, financial training, asset- and credit-building services, and entrepreneurial support networks to help them start and grow their small businesses.

Solution Overview

To grow 14 branches by 2026, GAI plans to open 2-3 new branches annually. GAI will evaluate target markets based on internal assessments, and by utilizing scorecards to objectively assess and prioritize new markets based on demographics, population density and mobility, business environment, and talent attractiveness. In current cities, we will open satellite locations to deepen our impact in existing markets. For new branches, GAI will conduct market research, partner with local organizations and organize teams using seasoned and local staff to start branch operations and conduct local outreach. We will expand our partnership model to ensure all borrowers receive the same educational, savings and credit-building services. Our goal is for each branch to reach full capacity within 5-6 years of opening, with 8-10 local staff and 5,000+ low-income women entrepreneur clients. With 100&Change support, our members can begin to lift themselves out of poverty and thrive. Exciting early findings from an MDRC evaluation reveal that just six months after getting their first loan, our members had already started their businesses, were experiencing less material hardship, and had begun to develop credit histories. Additionally, by year-end 2020, GAI’s current operations will become 100% sustainable from program interest income. To open 14 new branches and reaching 87,000 new women and their families, we need to raise $100M over the next five years. These funds will support: managing and growing existing operations, launching future branches, funding GAI’s loan portfolio, internal capacity building and training, programmatic expansion and implementing new initiatives and products.