Community Development Lenders Turning to Fintech for a Boost During Crisis

Black Girl Ventures levels the playing field for women of color who seek capital for their business ventures. Entrepreneurs are invited to pitch their ideas at crowdfunded sessions, which means the funding varies depending on the size of the crowd and its willingness to invest. In addition to capital, BGV recognizes the need for minorities to access a network, mentoring, and business coaching to navigate the systems necessary to build a business. The nonprofit has chapters in several cities and works with local organizations that are already in place helping black businesses.

A membership organization called Pipeline Angels helps women and nonbinary femme entrepreneurs find investors and start their own businesses. Pipeline Angels addresses the investment disparities between businesses owned by men and women.

A start-up accelerator in Salvador, Brazil is aiming to support black-owned businesses through its business incubator resources. Dende Valley, named as a nod to Silicon Valley, is an accelerator that prioritizes and trains black entrepreneurs to combat systemic racism and lack of opportunity in Brazil. There were 107 applicants for 30 spots this year, and the company expects to triple availability next year as people look to take advantage of their programs.

There is a substantial argument for increased involvement of private companies in venture philanthropy. Unlike large government bodies and NGOs, private companies are more nimble and experienced when it comes to strategies in marketing, R&D, creating pricing structures, and adapting to rapid social change. Three companies in India are seeing real results by serving India's poorest customers with a market-based approach.

The Brooklyn Cooperative Federal Credit Union provides small business loans to local Black and Brown businesses, through average investments of $24,000. This small, community lender provides more funding to local businesses than larger national banks like Citibank, Wells Fargo and Bank of America, helping support local businesses and finance community development.

Existing services and resources for entrepreneurs disproportionately do not help minorities and women, making it difficult for them to become successful. Programs such as MORTAR aim to help these under served entrepreneurs by providing capital to help their businesses take off.

At a time when university students lack opportunities and financial help to test their innovative business ideas, the Resolution Project supports higher education students who have ideas for socially responsible businesses and charities. Resolution offers small awards to start businesses as well as mentor opportunities that enable networking and business collaboration with experts.

A handful of entrepreneurial individuals in Kansas have found success in starting businesses during the pandemic by leveraging customer needs and pandemic relief funding. Although this business plan isn't "foolproof," in Kansas and nationwide, the number of entrepreneurs who filed applications increased significantly compared to previous periods.

Mosaic Development Partners (MDP) seeks to create wealth for the black community in Philadelphia by providing affordable housing and creating opportunities in neighborhoods that are considered risky investments for typical real estate companies. The black-owned company has created housing as well as retail opportunities for minority and women-owned businesses who historically have a harder time accessing capital and loans. The company is mission-driven but operates on a for-profit model, finding economic solutions for systemic problems that have kept black communities from creating generational wealth.

Refugee women arriving in Brazil have been able to achieve financial independence through the work of an organization called Women of the Global South, an organization that provides women with the tools and skills to sell textiles. In addition to providing entrepreneurial skills, it also helps refugee women with transportation, classes, sewing machines and even provides cash for emergencies and help getting in touch with family members they have been separated from.