Amid a swarm of 160 events as part of Global Entrepreneurship Week, the Ewing Marion Kauffman Foundation announced a new microlending program to spur investment in underserved entrepreneurs.
In partnership with four microfinance lenders, the foundation issued a series of grants totaling $1.2 million that a will change the way the nonprofit microlenders capitalize their loan pool funds for lending.
The foundation awarded grants of $300,000 each to AltCap, Women’s Business Center, KC Hispanic Economic Development Corporation and Justine PETERSEN. The program will offer capitalization opportunities for the nonprofit microlenders and Community Reinvestment Act credit opportunities for local banks.
The KC Microfinance Portfolio loans will be distributed in the spring of 2018 and sold into banks in the summer of 2018. Initially, the loans will provide funds to 20-30 businesses, the foundation said, but have the potential to help a broader pool of local entrepreneurs.
The microlending program represents the latest initiative in an ongoing effort from the Kauffman Foundation to help underserved entrepreneurs in the Kansas City area, said Nathan Kurtz, senior program officer in entrepreneurship for the foundation.
“This pilot program has been years in the making, with exploratory work now complete, and we are thrilled to bring it to life in KC,” Kurtz said in a release. “It is part of our Zero Barriers initiative to help reduce obstacles that have traditionally kept people out of entrepreneurship. Our hope is that if the pilot program can work here in Kansas City, it can work anywhere.”
Announced in February, the foundation’s Zero Barriers movement is taking action to eliminate barriers for people to launch new businesses, particularly underserved entrepreneurs.
Underrepresentation of minority groups and women hurts the U.S. economy by reducing the number of businesses and jobs they would otherwise create. If minorities started and owned companies at the same rate as white people, the U.S. would have more than 1 million more businesses and as many as an extra 9.5 million jobs, according to Kauffman Foundation data.