Micro-Credit Helps Immigrant Cash in on Dream of a Small Business

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The New York Sun

It cost only $2,500 to reverse the fortunes of Fatimata Lonfo.


A fireball packed into a petite 5’2″ frame, Ms. Lonfo visited the banks in her Staten Island neighborhood a year-and-a-half ago, determined to get a loan to expand her hair-braiding salon and African clothing boutique. From Citibank to Commerce bank she received the same response: Without credit history or a green card, no capital was available.


Ms. Lonfo, 42, doggedly searched for another way. An immigrant whose request for political asylum is currently pending and could remain that way for a decade, she was determined to work for herself. Her accountant suggested she contact a microfinance organization. For Ms. Lonfo, it was a familiar concept: The lending institutions that provide small loans are more common in her native Ivory Coast than in New York.


This morning, Ms. Lonfo is being recognized as a pioneer in a growing local population of micro-credit loan recipients. As the New York winner of the first Global Micro-entrepreneur Award, she is to tell members of the NASDAQ stock exchange of the challenges she faced in finding access to banks, and how the $2,500 loan was enough for her to complete a down payment to become a self-sufficient business owner.


The awards ceremony will also serve as the kickoff for the United Nations Year of Micro-credit, in which international experts are to explore means of using small loans to help the estimated 2 billion people around the world who have no access to financial services.


Closer to home, micro-credit is increasingly being looked to as a solution to problems of financial access.


“The reason why microfinance tends to be seen as something for the developing world is simply because of the ease with which you can find clients who have not had credit before,” the chief technical adviser at the U.N. Capital Development Fund, Christina Barrineau, said, noting that in developing countries, 80% of the sector lacks access to banking services, in comparison with 10% of the population of North America.


Among that 10%, Ms. Barrineau said, are immigrants who don’t have legal status, individuals who have never been part of a banking system or have bad credit, and ex-convicts – all of whom can benefit greatly from micro credit services.


“In America,” Ms. Barrineau said, “we have huge immigrant populations that have a very difficult time opening a bank account. Not because they’re poor clients, but simply because they don’t have a history.”


Since it was founded in 1991, the micro-lending institution Accion New York has disbursed more than $36 million in 6,100 loans, ranging from $500 to $50,000. Most of the loans have gone to Hispanic immigrants, but more recently Accion has made an effort to diversify its clientele, and this year it hired an African loan consultant to reach out to the growing – and highly business-oriented – West African immigrant community.


Other nonprofit organizations and credit unions, such as Trickle Up, the New York Association of New Americans, and Project Enterprise, provide micro-credit loans in New York as well.


For Ms. Lonfo, who is already looking forward to expanding the tailoring service of her store with the next loan, finding a way around the banking impasse was “extraordinaire,” she said, relying on her native French to express the emotion.


As she expertly plaited cornrow extensions into a client’s hair yesterday, Ms. Lonfo, a single mother of three, recalled the difficult days when she first arrived in America and discovered she would be unable to continue working in the airline industry, as she had done for 22 years in Africa.


“Jobs I never did in Africa I had to do here. But I didn’t have a choice. I closed my eyes and I did it,” Ms. Lonfo, who wears high heels and a business suit to her salon most days, recalled.


While she took on “disgusting work” cleaning homes and buildings and caretaking, all the time she braided hair at home. Later she also sold imported African clothes from her living room.


The two loans she received from Accion, first $2,500 for a down payment on her store and later $5,000 to purchase synthetic hair, have enabled her to become self-sufficient, she said. In addition to the financial advances, Accion has given her advice on developing her business, building credit history, and creating a business plan.


When she found out she had received the micro-entrepreneur award, Ms. Lonfo said, she fainted. Then she “got up to see the reality.” It is one she cannot wait to share with her elderly parents, who took refuge a few years ago at Burkina Faso.


“Nobody would think I would come to this big country and in only three years do something like this,” Ms. Lonfo said. “My story is a miracle, starting with nothing and watching the business grow.”


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