NEW ORLEANS – ASI FCU is working with the Jewish Funds for Justice to introduce a microloan program that will invest in small businesses along the Gulf Coast still struggling three years after hurricanes Katrina and Rita.
Modeled on Kiva.org, which enables individuals to give a loan of any size directly to entrepreneurs in the developing world, the campaign aims to enlist individual Americans to do the same for hurricane-ravaged businesses.
The campaign, called the 8th Degree, will give microloans ranging from $5,000 to $15,000, which will be distributed through the ASI. Asian-American grocer Kim Loan Cao, who had to relocate her supermarket after Katrina, has just received the first loan – $15,000 to enable her to increase her inventory. Two other entrepreneurs are in the approval process; several others have requested applications. JFSJ has committed to matching every dollar donated for the first five loans.
The campaign gets its name from the teachings of the medieval Jewish philosopher Maimonides, who said there were eight degrees of "righteous giving" and that the highest degree involved helping others to become self-sufficient.
The 8th Degree will recycle donors' contributions to additional borrowers as the loans are repaid. The repayment period will range from three to seven years, depending on the size of the loan. Donors will pick the individuals they want to invest in and receive progress reports.
To qualify for a loan, business owners must meet criteria such as being in business for at least six months prior to Katrina, having 25 employees or fewer, being located within a federally mandated Katrina disaster area, and being able to demonstrate ability to repay the loan.
