Mandela Foods in West Oakland is one example of how micro-lending can help small businesses get off the ground and thrive. If the City Council signs off on that proposal, Oakland will become the first U.S. city to become a trustee, basically endorsing three local businesses to receive 0 percent loans of up to $10,000 loans each.
"I'm an Oakland native and it's important for me to be part of the community in some way," said Oakland business owner Loretta Nguyen.
Nguyen is living out her dream, owning and operating her own business, but making it add up to sizeable profit hasn't been easy.
"I used credit cards, then of course I racked up a lot of debt. It would be nice to be able to consolidate some of that debt and have a lower interest rate on them and be able to expand my labor force," said Nguyen.
She is exactly the type of business owner Oakland City Councilmember Libby Schaaf is trying to reach. Schaaf and city attorney Barbara Parker are hoping the Oakland City Council will approve their push to team up with San Francisco based non-profit organization, Kiva. By providing capital to those who don't have access to traditional lines of credit.
"This becomes a revolving fund so once any one of those business pays off that initial loan, then we can designate a new business," said Schaaf.
If approved, Oakland will become the first U.S. city to partner with Kiva through its Zip program. Essentially, giving a green light to the business they believe best represent the city.
"They can actually now access $5,000-$10,000 loans at zero-percent interest," said Oakland Deputy Attorney Kiran Jain.
And everyone has an opportunity to "buy-in." users on Kiva may contribute as little as $25 to an applicant's requested loan amount, lenders contribute until the loan is 100-percent funded. Mandela Foods Cooperative in West Oakland is one example of micro-lending success.
And, the more lenders you have, Jain says "the higher the repayment rate is. There is this commitment you see people making in your business and you want to honor that commitment."
One Oakland city official tells me that they hope to approve a business in as quickly as two weeks. They're encouraging others to apply as well.
