Mini Loans in U.S. Feed Borrowers’ Big Ambitions
Mohamed Diallo is a foot soldier in the army of savers that banks are leaving behind. A livery cabdriver in New York, he wants to start a fruit-importing business. But his dream is clashing with a harsh financial reality.
After subtracting the cost of leasing his cab, his rent and other expenses like food and a cellphone, the 56-year-old recent immigrant from Guinea typically has just $300 to deposit into a savings account at the end of each month.
With no credit history, he turned to a form of lending usually associated with developing countries: a microloan. He got a $2,000, two-year loan through the Business Center for New Americans, a nonprofit group with a mission to help refugees, immigrants and other people achieve economic self-sufficiency.
The loan and a $4,000 grant through a U.S. program aimed at spurring savings among low-income refugees made it possible for him to use his savings to buy a 2004 Lincoln Town Car for $8,000. “I opened a savings account, but I don’t understand how to ask for a loan,” he said.