This Nonprofit Helps Small Business Aid Go Where it Usually Doesn't

Mumbuca is a digital currency used in Maricà’s basic income program. Residents, with few eligibility requirements, can qualify for a monthly stipend to purchase goods and services using a smart phone or a card. The currency runs on the digital platform E-dinheiro and can only be spent in the city limits. Individuals cannot swap Mumbucas for national currency, but businesses can after a 48-hour waiting period and a 1% fee. Local currencies, which are popular in Brazil, help residents increase personal savings and, with increased stipends during the Covid-19 pandemic, allowed informal workers to stay home.

A nonprofit called Common Future is acting quickly to support business owners during the coronavirus crisis. Their board allocated a set amount of money specifically to keep on hand as a rapid response fund, and by early April 2020, they distributed $250,000 in emergency funding to seven organizations. The recipients are intentionally from disadvantaged communities, like rural, black, Indigenous, and other hard-hit demographics. Each organization used the money in different ways to support their target communities. Common Future also set aside 6 months' worth of operating expenses as a buffer.

Public banks are owned and run by governments, and because they store money for the state instead of individuals, they can invest back into the communities they serve instead of extracting from them in the chase for profits.

CNote has provided a source of funding for federally certified Community Development Financial Institutions by pooling cash from foundations, bigger banks, philanthropists, and donor-advised funds to counter the lack of available cash flow experienced by CDFIs, which are lenders but not banks. Federal COVID-19 funding set aside $30 billion specifically for CDFIs that overwhelmingly lend to women- and minority-owned businesses, which face persistent racial and gender biases and are unable to successfully tap into lending and grants such as the Paycheck Protection Program through traditional lenders.

Community banks in Texas have outpaced much larger national banks in approving and funding loans that are keeping businesses afloat during the pandemic-induced lockdown. The lone star state leads in the number of loans processed totaling $17 billion - saving a reported 200,000 jobs. Businesses in Texas have received more loans than any other state due to community banks that have been working around the clock. The banks have managed to approve as many loans as they typically would in an 18-month period.

Lift to Rise, a Coachella Valley nonprofit that pushes for housing and poverty policy change, launched a local lending circle program aimed at serving minority residents break the cycle of poverty. Partnered with San Francisco-based Mission Asset Fund, the lending circle helps those with poor credit or no credit at all to build up a spending history, have access to loans, create a savings account, improve their score, and more. Since 2008, Mission Asset Fund has partnered with more than 50 organizations across the U.S. to provide lending circles to more than 9,000 clients.

Historically, banks have been largely hesitant to give small loans to individuals, particularly those with little or no credit history, which includes many immigrants and minorities. But an institution called Oportun is willing to bet on the underserved while still staying profitable as a business - they provide increased access to loans by leveraging a solid screening process, online resources, and credit score support for their customers.

A husband and wife team in Bangalore (Bengaluru) have created a peer-to-peer, online micro-loan platform to help make poverty history by addressing credit needs of underserved communities. Lenders on the platform can choose the individuals and projects they loan to, and interest rates are kept low so as to be accessible for the recipients. The platform, Rang De, has seen great success and boasts a 93% repayment rate.

A large number of Americans are "unbanked or underbanked"—meaning they are not tied to traditional financial institutions to manage their money—which makes saving difficult. Walmart has managed to serve this population with a debit card program called MoneyCard that provides financial incentives to users to regularly put aside money into a "vault." This approach effectively takes into account behavioral economics in terms of how humans approach short- versus long-term rewards. Launching in August 2016, the program's membership had grown more than 130% and savings increased by 38% by December 2016.

Years of misrule and a subsequent dearth of hard currency, along with crippling bank-fostered debt cycles and exorbitant home mortgage interest rates, have created immense suffering for Myanmar's poor. But with the guidance of a local NGO, Women for the World, a pilot project helped women in some of Yangon's poorest neighborhoods capitalize on their cultural "head-of-household" status. It helped them form and manage community savings cooperatives, secure land, build homes, buy food, and even generate profit through loans to families' business enterprises.