"This is such a great place for social entrepreneurship, because let’s face it, this is a place with a lot of social problems."
“A lot of the economic development policy in this state is always hoping for that homerun,” says micro-financier Andy Posner. “I’m looking for thousands of singles.”
That’s precisely the foundation on which micro-finance is built. In short, micro-finance is the provision of financial services – particularly loans and credit – to poor or low-income clients. The idea is that tiny amounts of money (at least compared to American standards) can change lives in profound ways: loaning a few hundred dollars to help a farmer in the third world purchase livestock or a poor immigrant in America buy a computer can be the first step in breaking the cycle of poverty.
Posner set out to work at what he calls “the intersection of poverty and environment.” While working on his thesis at Brown, he began exploring the ways that small loans can get people out of poverty – and he saw them in his own backyard. “Providence is a majority minority city with a lot of poverty, but I see a lot of immigrants that have tremendous entrepreneurial capacity,” says the son of a Ukrainian immigrant. “While they wouldn’t start the next Google, they could start hundreds of small, community based businesses.”
To that end, Posner launched his Capital Good Fund in 2009, offering financial coaching, tax preparation and small loans to clients in need. The fund has developed partnerships with other local nonprofits working in similar communities. The International Institute, for instance, refers clients in need of several hundred dollars to obtain citizenship. This kind of work is micro-finance at its best, helping to create new citizens and new entrepreneurs from the ranks of underserved communities.
Posner is optimistic about the future of the Capital Good Fund. In its short life, the fund has helped 50 people improve their credit scores and made 112 loans. He hopes that in 2012 it will provide financial coaching to 400 people, resulting in 225 loans. Furthermore, he sees potential beyond our borders for his innovative and rigorously researched business plan, proving its profitability and self-sustainability. “I firmly believe our model can go nationwide,” he declares.
• Is a native of Los Angeles.
• Twitter Handle: @cgfund
• Once spent three weeks in the slums of Cairo, Egypt building water heaters out of garbage.
• Is on the Board of Directors of the Association for Enterprise Opportunity (“The voice of microenterprise in the U.S.”), based in D.C.
• Appeared on CNN’s American Morning to talk about his work on December 20.
• Has a BA in Spanish Language and Culture from Cal. State, Northridge and Master of Arts in Environmental Studies from Brown.
• Rode his bike from Virginia to San Francisco in 2005.
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