Wells Fargo has awarded Grameen America with a hefty loan to provide microloans to female entrepreneurs. The allocation is $1 million of equity equivalent investment and $6 million as senior debt facility, which will act as revolving funds. Grameen is a New York-based microfinance organization with a focus on female entrepreneurs, who it calls “engines of economic growth” across the nation. Grameen will allocate the loans to female-driven startups that are struggling or seeking to expand. The expected yield is more than $42 million in startup loans and expansions for 100,000 under-resourced female founders over a three-year period.
Grameen America will use the funds to increase its influence in New York City, Los Angeles, and San Francisco. Through increasing micro-lending, the organization aims to support low-income women and “empower women entrepreneurs through access to capital, savings and credit-building,” according to Andrea Jung, CEO and president of Grameen America.
The investment from Wells Fargo is part of the financial firm’s Diverse Community Capital initiative, which will provide $75 million in grants and lending capital to financial institutions that intend to serve diverse small businesses from 2015 to 2018. This program is an expansion upon the findings of a Gallup study of small business owners that Wells Fargo commissioned in 2015. The study discovered that many diverse business owners are likely to be in the early stages of their business and may not yet qualify for conventional bank loans. The firm hopes to use this information to increase access to financial services for diverse business owners.
