Grameen America, a US-based NGO founded by Muhammad Yunus, recently raised an undisclosed sum via a Social Business Fund for on-lending to women with low-incomes in regions of the US that are underserved by traditional financial institutions. Investors in the fund receive a “nominal” interest rate with a “targeted” term of five years. They are also protected by a first loss guarantee on one fifth of their investment principal. The investors have not been identified.
During its first 10 years of existence, Grameen America was funded mostly by donations and concessionary capital. Regarding the Social Business Fund, the organization’s CFO, David Gough, said, “We wanted to offer our donor base an additional way to fund our growth.” Grameen America’s goal is to disburse loans totaling USD 2 billion through 2022.
Grameen America seeks to reduce poverty by offering enterprise loans and related support services via 20 locations in 13 US cities. As of 2016, it reports USD 78 million in assets, USD 19 million in revenue and 86,000 people served. Since its launch in 2008, it has provided 500,000 hours of financial literacy training. Grameen America reports a repayment rate of 99 percent.
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