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Economic Development Thu Jan 22 2015

New Chicago Microlending Initiative to Aid South Side Businesses

CNIMFG.JPG
Obama cabinet members met Monday at Ain't She Sweet Cafe in Chicago's Bronzeville neighborhood to announce a new microfinance initiative on the the city's South Side. / Photo courtesy of SBA

Small Business Administration (SBA) administrator Maria Contreras-Sweet was in Chicago Monday to announce a $750,000 investment in Chicago Neighborhood Initiative's Micro Finance Group (CNIMFG) -- the latest federally approved microlender serving Chicago's South Side area.

"CNIMFG is committed to bringing affordable microfinance solutions to low-income individuals or small business owners who do not have access to traditional sources of financing," said Erica King, CNIMFG's Vice President of Lending.

Due to their modest size of loan requests and limited or non-existent credit histories, King says her organization's clients are often shut out of traditional business-finance routes. That's become a real barrier to economic growth in lower-income communities.

CNIMFG hopes to utilize microfinancing to expand job opportunities and stimulate economic growth in underserved communities where traditional bank loans are hard to come by.

The new funding will quadruple the organization's capacity to finance and counsel small businesses and new startups on Chicago's South Side, according to CNIMFG.

"Chicago has created an outstanding micro lending model that we expect other municipalities to replicate. I commend CNI's Microfinance Group for joining the SBA network, allowing them to access the maximum amount of $750,000 in low interest capital from SBA each year," says Contreras-Sweet. "CNI will play a vital role in meeting the needs of businesses in predominantly African-American neighborhoods."

According the group, Chicago has invested approximately $1.6 million in microloans to 179 businesses across the city over the past couple years. Nationally, SBA microlenders issued 3,919 loans in 2014, totaling more than $55 million.

 
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