SPECIAL EDITION: CORONAVIRUS: Andrea Jung on How Microlending is Helping Women Entrepreneurs

CEO of Grameen America, Andrea Jung tells how micro-loans, innovative financing and a community built on trust are helping women entrepreneurs pull through the coronavirus crisis.

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Episode Transcript

Speaker 1 (00:04):
Hi. This is Malan Vervier and this is Kim Azarelli.
We are co authors of the book Fast Forward, How
Women Can Achieve Power and Purpose. And you're listening to

(00:26):
Seneca Women Conversations on Power and Purpose, brought to you
by the Seneca Women Podcast Network and I Heart Radio.
Welcome to this special edition today. During these difficult times,
we're talking to experts who can help us gain perspective
on the impact of coronavirus, as well as share tips,
resources and some much needed inspiration. Today I'm joined by
President and CEO of gramin America, Andrea Young Andrew thanks

(00:49):
so much for joining us. Thank you. I hope everybody
is safe and staying healthy and pleasure to be here.
Thank you, Andrea. Uh So. For listeners who don't know
um about gromin America, uh tell us a little bit
about the organization and who you serve. Sure so. Comin
America is the fastest growing and largest micro finance organizations

(01:13):
in the United States. We give entrepreneurship loans two women
and their families who are living at or under the
poverty line. We serve members in twenty four locations. Uh
and we are in fifteen cities. We have dispersed over

(01:35):
one and a half billion dollars of loan capital since
the organization started in two thousand eight. And what's pretty remarkable.
These are nonrecourse loans and over that money has been repaid.
Uh So it's been amazing. We've served over a hundred
and thirty thousands women and their families across the country. Amazing, amazing.

(01:57):
Just for the listeners, Uh, what do you mean by
non recourse? Meaning that if you or I has a loan,
a traditional loan, we have to have some kind of collateral,
it has to be back um, and that is not
the case with Agremen loan. We obviously want to encourage behavior,

(02:19):
encourage them to build a credit score and repay, but
if they cannot repay, uh, you know, that is the
loss of the organization. Amazing. So uh so you're really
addressing women entrepreneurs in sort of low income circumstances. How
are they being affected right now? Well, extraordinarily hard him.

(02:40):
I mean, if I go back before the pandemic, I
just look back over the last ten years, women in
general who are business owners um have an a harder
time accessing capital. A one dollar at his twenty three
dollars in two thousand eighteen was given to a woman entrepreneur.
And that's for her sense, and certainly at our level,

(03:02):
if you're in a woman in poverty, a low income family,
that's even tougher. So women are been disproportionately affected, um
in the ability to access capital. One of the things
that we've been doing, obviously since we started in o
A is making sure that we level that playing field right.

(03:25):
The pandemic and is hitting you know, all businesses. I mean,
certainly the number one priority is the health and safety
of all Americans in every single city. Uh, and we
we understand that. But equal to that is is as
we come out of this health crisis, the economic impact,

(03:45):
particularly to micro and small businesses is huge. Uh. The
restaurant owner who you know, spent ten years building up
a tiny business with two employees. It's a great little restaurant. Um,
she would have been a member with me and paying
us back every single week, you know, building credit, serving
more and more people in the community. She, like every

(04:07):
other restaurant, is shut. She's not as large, she doesn't
have the same kind of balance sheet. You know, she
only has weeks before potentially you know, she has to
shut down. So the impact on micro and small businesses
is huge all over the country. To Gramine certainly, but
to to other organizations that lend two small businesses, and

(04:30):
to the small business owner herself, uh, certainly for themselves
and their families, trying to be safe uh and protect
protect their loved ones, and yet worrying equally and having
an extraordinary amount of anxiety about the economic impact that
he's going to have and paying that next month rent.
We know that your community in particular has a lot

(04:52):
of service businesses, right, so it seems like that would
be uh, your community is disproportionately affected. Is that is
that right? Well? Are half of our businesses are service
businesses and half of them sell products. And certainly the
service businesses are immediately hit. So if you're running a
nail salon, a hair salon, if you are cleaning services,
people don't want you in their homes. If you're running

(05:13):
a small food establishment, yes, of course, just like the
big establishments in that space, but certainly the small ones
they are being hit super, super hard. And the other
thing that's amazing about Gramine and the model is, as
you said earlier, the repayment rate being so incredibly high,
and I think that's due to the unique way that

(05:33):
you um lend money. Could you talk a little bit
about the social capital model. Yes, I mean it has
been an extraordinary two weeks of a pivot and a
transition because GRIM in America, like many micro finance organizations
all over the world, really has been centered around social

(05:53):
capital and community. So equally important to the money that
we land our members are the fact that we have
anywhere from on a given day to thirty people at
a center meeting, and we have over two thousand centers
going on every week where women are coming together sharing

(06:14):
their best practices, really forming a peer network of other
women entrepreneurs. In addition to having our staff who are
are financial coaches, are center managers as we call them,
uh really teach them the disciplines and financial education. So
that has been the alchemy and the glue of the

(06:35):
Grameen model for nearly twelve years here in the United States.
And the first city that started social distancing and then
that moved to shelter at home and you cannot go
out obviously put this concept of coming together as community,
which has been so critical UM at great odds with
the proper and mandages thing to do. So I'm really

(06:58):
proud that we have conver it completely to virtual community.
So if you can imagine um in terms of current
members who have loans, we're talking about, you know, close
to sixty thousand literally dialing into Zoom calls thirty at
a time, entering their past codes and continuing their community

(07:22):
but over zoom type technology, not in person. That has
now been converted in every single city across the country,
So we have tens of thousands of women now participating
in their GAMIN America Center meetings virtually we have technology

(07:43):
that can enable the process. So every single GAMIN American
member has a card. It's a card, a disbursement card
that we can load their loan onto and it comes
directly technology wise from our central bank. So therefore they
don't have to come to us and get a check
for a loan. They can just have it loaded and

(08:06):
and sit on their couch at home, not leave their home,
and get their loan loaded onto it. They can repay
us with virtual and remote repayments capabilities, and all of
this wouldn't have been possible several years ago, but we
are ahead of many microfinance institutions in terms of adopting
this technology as tools for these women. We've been working

(08:29):
on it over the last few years. We never dreamed
that this crisis would be the time that conversion and
adoption of this would have been a necessity, not just
an enhancement. But thank goodness because we now have these
tens of thousands of women who can participate in the
loan program, who can continue to come together as community
and support each other in a very very fearful time.

(08:52):
And that infrastructure is in place and rolling right now.
You know, obviously we have centers that are spending in
the middle of Queens um just you know, blocks from
Elmhorst Hospital. That's the hardest hit obviously at the center,
and an extraordinary difficult time for our members in New York,
but every city. But I actually had a call from

(09:12):
my branch manager in Austin yesterday and said to me,
basically had a hundred percent attendant online attending virtual meetings
and that list. I was just so proud, so proud. Well,
I mean, obviously the bond and the social capital bond
translates into everything positive that Grimin does, including those incredibly
higher payment rates um and and the building of credit

(09:34):
for those women, and it comes from trust. I mean,
and when people ask me all the time, I mean,
how do you have an over payment right when there
is no collateral or recourse on the loans And the
answer is trust, gratitude. These women aren't able to get
loans from the formal capital market. You know, credit is
a basic human rights. Access to capital is a basic

(09:56):
human rights for women as well as men. And because
we deploy it so quickly and because we believe in
giving them that capital, they're so grateful. And in this
time we're trust on everything is still critical. The ability
to share their concerns, help each other. It's more important

(10:17):
than ever all of us who are in social isolation
right now now that it is may not be in person,
but the people that we're talking to loved ones for
peers help and that's what they have with this our
true meeting. So uh, they get their loans loaded through
their cards. And obviously, um, this is a very hard time,
as we said, to be a small business and many

(10:38):
of these um, many of these womo either won't be
able to pay or will need certainly significant support. What
are you doing right now to address the loan portfolio
that you have. We took some very fast actions, difficult
but important for our members. So as of tomorrow, I
will first all the way through the end of June,
our members will pay zero interest. We will waive all

(11:00):
interest fees on those loans um. Secondly, UH, they have
to repay us by these remote digital methods, whether it's
a direct repayments from their bank and a h transactions,
whether it's going into a convenience store or pharmacy where
we have a payment opportunity that goes directly back to us,

(11:21):
or a debit card repayment. All of those transactions have
a cost to range from eighty cents to a dollar
ninety nine transaction. But that's a lot of money to remember,
So during this period, we are covering all those costs UM.
And the third thing we're doing is, you know, allowing
them to restructure their loans UM. If you know, andreas

(11:43):
in weekly installment with three dollars and I had twelve
more weeks to pay my loan, and we're doubling that
and allowing to pay back in twenty four weeks and
only pay half of the amount. UH. And then for
those who you know are really struggling with certain businesses
were certain looking for supporters and partners to help us

(12:03):
with you know, bridge loans and back stops to help
some of our members in this time or just struggling
no fault of their own. I have had um, extraordinary
business owners who were perfect payments track records, UM, great,
great business records, want to keep their employees on staff,

(12:24):
and then because of circumstances out of their control, I
don't have any customers in this moment. So are our
goal and our commitment is just trying, you know, tied
them through this difficult period. And then unlike other organizations,
I mean, they're not being laid off. You know, they
own that food card, they have that flower shop. UM.
Hopefully as soon as things do open up in the

(12:45):
right time, not too soon, but when the health crisis allows,
the bounce back will be fast. Um. And our our
job is to make sure we can bridge them through
this difficult time and can the stimulus package help. It
may be able to help some of them, um, but
the time the administration in terms of how to get it.
I mean one of the things that Gremine America does

(13:05):
is tomorrow, uh, you know, in twenty four hours, we
can deploy capital immediately, no pay for work um, no
cumbersome confusion. They know the process and that's why you
know when when they needed the most, because they can't
wait a week, right, some of some of these applications
you know, are due by June thirty. If they can't
wait until June thirty. Yeah, amazing to have to be

(13:27):
part of this community right now there. I'm sure they're
very grateful to be part of the Green family. They
are very nervous in that grade and mostly grateful to
have our commitment even in these hard times. We'll be
back after this break. I mean, you've worked with women

(13:52):
for so many years. I mean obviously first said Avon,
for many many years leading Avon, and now with Gremin.
I mean, what have you seen in terms of the resiliency?
You know, I could get on a soapbox for a
long time about this because I've had the first hand
experience over several decades of seeing um, the innovations and
the resilience of women entrepreneurs. I think it's been well

(14:16):
known and well documented that when a woman earns a dollar,
that dollars has a greater impact and she will put
more of that back to community, to her children, to education,
to health, um. And I think we're going to see
that more than ever now. Uh We While on one hand,
women are disproportionately negatively affected in terms of their ability

(14:39):
to access capital, when a woman entrepreneur is able to
run her own business, we see that the growth of
that business is fact. She pays equally, she takes care
of her employees, and you know, I think it goes
without saying. I mean, I think that there's so much

(15:00):
data again before COVID nineteen that says if we just
had equal access to capital, equal pay, equal participation of
women in the economy, it is trillions of dollars of
economic growth. So just substituted post COVID and say the
recovery will be disproportionately as far as I'm concerned, driven

(15:22):
by making sure women start participate and part taking that recovery.
Women are resilient, they are innovative. Um, that we'll play
itself out. And I mean that's what we're all crossing
our fingers for and that's why we have to continue
to support them to this time. Well, my last question
was gonna be what makes you optimistic in this moment um?
But I feel like you've just answered it. It It seems

(15:43):
like the resilience of women. I mean, it's hard. It's
such a dark moment, you know, it's it's such a
difficult time and understandably, so what what has to keep
us all optimistic and hopeful is the community that we
are seeing at every level I get to see it.

(16:04):
You know, it's a two thousand strong right now with
every green center that is being done in a very
different way, but it's still community. And you know, while
they have huge anxiety and fear um, they have to
be hopeful. They are by humans and women are by

(16:24):
definition are optimistic, and we will prevail if we do
all the right things critical to count on them to
be the moral and financial support of the community. And
I am optimistic about that. I am optimistic with that
that will serve us well through this crisis and then

(16:46):
into what is obviously a critically important recovery period for
every economy around the world and certainly for this one
right here in the United States. Well, we're grateful that
you're leading for me in right now. We could not
be in better hands. So we appreciate everything you do.
Andrea um It's listeners want to support or mean what
can they do in America dot org donate now. Well,
thank you so much for being on the show. I'd

(17:07):
love to bring you back if if you can do
it in the next few weeks and see if you
can give us an update on what's going on for
for women around the country. Thank you, said everyone. You're
listening to Seneca Women Conversations on Power and Purpose, brought
to you by the Seneca Women podcast Network and I

(17:28):
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(17:51):
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