SAN
JOSE, Calif., May 15, 2024
/PRNewswire/ -- Accion Opportunity Fund (AOF) published research
today showing the macro-economic benefits of nonprofit
micro-lending. The fourth edition of Ripple Effect analyzes
the direct and indirect impact of the $628
million AOF lent between 2016 and 2023 to 16,500 small
business owners, more than 90% of whom are women, people of color
or low-income borrowers living in California, New
York, Florida, Texas, and Georgia.
On average, every dollar AOF invested in traditionally
disadvantaged small business owners during this period created
$2.05 in economic activity in these
states, its report said.
"A small business loan isn't just a one-time capital injection,"
explained Dr. Joshua Miller, AOF's
Vice President of Research and Policy. "It enables a small business
owner to pay their suppliers, cover employee wages, and
more—catalyzing greater downstream spending that ripples across all
parts of the economy."
AOF goes beyond lending. It provides entrepreneurs with
resources ranging from coaching to networking opportunities. AOF
discloses all pricing terms and conditions upfront and works with
borrowers having difficulties paying. Leveraging philanthropy and
government grants, AOF offers rates lower than many for-profit
lenders in loans ranging from $5,000
to $250,000.
AOF's report, using econometric models, breaks down how each
state specifically benefited:
- In California, AOF lent
$551 million to small business owners
throughout 52 counties, adding more than $1
billion to the state's economy.
- In New York, AOF lent
$25 million in 27 counties, spurring
more than $44 million in new economic
activity in the state.
- In Florida, AOF invested more
than $22 million in 46 counties,
adding more than $45 million to the
Sunshine State's economy.
- In Texas, AOF invested nearly
$17 million across its 59 counties,
adding nearly $40 million to the
state's total output.
- In Georgia, AOF invested
$9.8 million in 51 counties, adding
more than $21 million to the state's
economy.
"There's been an explosion of online lenders over the last
decade, many of them are making predatory loans, charging
exorbitant rates, particularly for small businesses owned by women
and people of color," explained AOF's CEO Luz Urrutia. "Our research shows there's a
critical role for Community Development Financial Institution
lenders like us. Ripple Effect shows nonprofit CDFI lending
to underinvested business owners creates widespread economic gains
extending far beyond the immediate borrowers. We want our research
to catalyze more responsible lending to entrepreneurs in overlooked
communities."
On May 17th at 2:00 p.m. ET, AOF will host a webinar to discuss
these findings and engage in conversation with attendees. Register
here.
Accion Opportunity Fund works to advance economic mobility
for low-income communities, women and people of color who own small
businesses through affordable capital, knowledge resources,
networks, and policy. Accion Opportunity Fund Community Development
is the lending arm of Accion Opportunity Fund, California Finance
Lender license #6050609. More at aofund.org.
Media Contact
Tim
Hay
tim@synthesismediallc.com
(510)
593-0285
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SOURCE Accion Opportunity Fund