Jennifer Lopez to Back Latina Entrepreneurs With $14 Billion Partnership
The celeb wants to reach 600,000 Latina entrepreneurs through the loan program.
Jennifer Lopez’s new partnership is providing Latina entrepreneurs with a $14 billion infusion in loan capital by 2030.
Lopez is teaming up with Grameen America, a New York City-based microfinance organization, to expand access to capital with the goal of reaching 600,000 Latina entrepreneurs, while also investing six million hours into financial education training for these women as well.
“We’ve been the valet parkers, people cooking in the kitchen and housekeeping. This is what I grew up with,” says Lopez. She also shares with Inc. that her mom didn’t go to college because she didn’t have that access. But through the partnership, Lopez hopes to create a more equitable and inclusive landscape for Latina entrepreneurs.
The mission of Grameen underlines how access to business capital is a human right, according to Andrea Jung, CEO and president of the organization. “Regardless of gender, race, or income, we want to make sure that everyone has that pathway out of poverty and toward financial inclusion in a system that essentially disadvantages communities of color and disadvantages women from the lion’s share of capital access,” Jung tells Inc.
Jung adds that Grameen’s intention is for the loans to help entrepreneurs build business income–which she says is “reflected in the 13-year historical 99.6 percent repayment rate by these women.” Jung says that the average loan size at Grameen hovers at around $5,000, though first-time loans don’t surpass $2,000 when a member joins the program.
To access the loans, interested parties must become a member of Grameen. They’re then required to complete a one-week-long financial training course prior to receiving their loan but must continue participating in weekly financial literacy sessions. Members of Grameen must also make payments on their loans on a weekly basis.
The loans are meant for business use only (rather than consumer loans) and can be used for working capital needs, ranging from inventory to new equipment to rent and so on.
Jung explains that the institution expects businesses that are applying for the loan to be legal within their states as well. That suggests that those operating in the cannabis space in Colorado, for example, could be eligible for a loan here. And that’s not always the case–Tito’s recently announced a $250,000 grant program to expand capital access for entrepreneurs, but barred a slew of more controversial sectors from submitting applications.
Jung explains that many women who seek out loans from Grameen often come in with a poor credit score or no credit score at all. As such, these women are traditionally excluded from mainstream lending institutions. That also explains the interest rates behind the loans: Jung says the annual percentage rate (APR) in most states is 18 percent, though in others it’s 16 percent. Still, Jung points out that’s far lower than the APR incurred on, say, credit card debt. But Small Business Administration-backed loans–including its popular 7(a) working capital loan–typically charge below 8 percent in interest.
Even so, Jung is adamant: “It’s a very affordable loan product, compared with the alternatives for people who cannot qualify with the traditional banking system,” she says.
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