Deborah Bafongo started her South Portland business, Angels of Love Event Design, in 2019 without any outside loans or grants.

Bafongo specializes in providing decorations for formal events, especially weddings, and had hoped she would be able to work on enough weddings in 2020 to be able to earn back the money she spent on equipment. However, when the pandemic hit and weddings were canceled en masse, Bafongo found herself in need of some extra help to keep her business afloat.

Through a mutual friend, she heard about a program being offered through the Greater Portland Immigrant Welcome Center that would provide interest-free loans to business owners like her. Bafongo, who immigrated from the Democratic Republic of Congo in 2014 and lives in South Portland, received a loan of $2,500 with a repayment term of 21 months. She plans to use the funding to purchase a bigger storage unit to use as a showroom for her designs, as well as more equipment.

“I really needed the funds,” she said. “As an immigrant, I’m really grateful that this platform is there to help us succeed in the career that we’re doing. … At that point (because of the pandemic), I really needed something coming from somewhere to assist me.”

INNOVATIVE PARTNERSHIP

The funding for Bafongo’s business is the result of a partnership between DreamxAmerica, or DxA – a national initiative combining storytelling and impact to support immigrant communities co-founded by Andrew Leon Hanna in 2018 – and Kiva, a nonprofit that allows people to lend money online.

DxA released the storytelling component of its project, a documentary featuring three immigrant entrepreneurs in North Carolina, in November 2020. When it came time to launch the impact side of DxA’s project, Hanna approached Rohit Agarwal – the head of Kiva’s U.S. program and a connection from the time that both spent working at global management consulting firm McKinsey & Company – to form a partnership that could provide funding for immigrant business owners.

Immigrant entrepreneurs can face challenges accessing traditional bank loans – sometimes because they lack established U.S. credit histories and sometimes because of racial or cultural discrimination.

“A lot of times, the banking system does not treat low-income, minority and immigrant folks as well as they should,” Hanna said. “Sometimes, there’s a lot of distrust and sometimes there are rates that are unfair. … Why we appreciate Kiva is that (the loan) is very pure, it’s very straightforward. There’s not any rate to research or other hidden fees. It’s zero interest, zero fees.”

DxA partners with four local organizations nationally – including the Welcome Center – that advertise the loan opportunity and support business owners throughout the application process. Staff at DxA edit applications to tell their stories more concisely in an effort to attract as many lenders as possible, and a team at Kiva reads the official applications and determines the loan amount the business qualifies for. Then, DxA promotes the business owner’s borrower profile until the loan is fully funded.

Agarwal said the local organizations DxA partners with are critical to building trust in Kiva’s loan program.

“The main way for us to build trust – and within a lot of these communities there is rightfully a decent amount of distrust in traditional financial institutions – is through trusted partners on the ground,” Agarwal said. “And there enters DreamxAmerica, which I think has done a fantastic job building trust through immigrant welcoming centers (and) through different other intermediaries to say, ‘Hey, here’s a good source of capital, zero-fee, zero-interest.'”

These local organizations often already have close partnerships with immigrant business owners and can serve as a trusted intermediary.

“Most small-business immigrant entrepreneurs aren’t going to just wander onto the Kiva site and say, ‘Oh, this looks good,'” Hanna said. “You need somebody to vouch for it.”

Navid Ahadzadeh, a recipient of an $8,500 interest-free loan for his Casco-based business, Scratch Master Mobile, a traveling auto repair shop, used part of the loan to purchase a new van. Derek Davis/Staff Photographer

IMMIGRANT ENTREPRENEURS

The Welcome Center’s business hub, which was started in 2017, plays that role in Maine by connecting immigrant business owners with various sources of capital.

“Research shows that immigrants, nationally, are more likely to start businesses and small businesses than native-born Americans,” said Reza Jalali, the center’s executive director. “By doing so, (business owners) create jobs not only for themselves but for others in the community. Part of what we do at (the) business hub is help immigrants to access funding and then help match them with lenders.”

So far, seven Maine business owners have had their loans fully funded through the DxA-Kiva Special Initiative, with two others still in the process of being funded.

Navid Ahadzadeh, the founder and owner of Scratch Master Mobile, a mobile auto repair service based in Casco, knew Jalali through the local Iranian immigrant community and successfully applied for an $8,500 loan to expand his business. He used part of the loan to buy a new van.

“Because my business is a mobile business and (because of) my old van, the options I have were kind of limited,” Ahadzadeh said. “So when I get a bigger van, it (will be) more reliable, more professional. It will look professional.”

Ahadzadeh moved to the U.S. in 2009 from Sari, Iran, because of persecution in his home country that limited his career options.

“I’m a Baha’i, and the Baha’i is a highly persecuted religious minority in Iran,” Ahadzadeh said. “Baha’is in Iran are not allowed to pursue higher education, and many businesses owned by Baha’is are shut down by the government. So knowing that people out there are helping you for the loan and everything else in another country just makes me very happy.”

USEFUL FOR MUSLIMS

In addition to helping with immigrant business owners’ limited access to capital, interest-free loans have a religious significance for many, as well. Traditionally, Islamic law forbids paying interest on loans, leading many Muslim immigrant business owners to seek loans from sources other than traditional banks. This was the case for Humza Khan, the founder of Inclusion Maine, a diversity, equity and inclusion consulting firm based in Westbrook. He received a loan of $6,500.

Humza Khan

“One thing that interested me about this program was the interest-free component of it,” said Khan, who was born in Pakistan but grew up mostly in Maine. “I could obviously go to – anybody can go to a bank, or they can go to venture capital, they can go and raise the money … but for me, really for religious reasons, I wanted to avoid interest.”

“(With the loan), I can invest in the things that I’m working on and pay it off over a period of time and still be in compliance with (my) religious beliefs,” Khan added. “That’s what attracted me to this program versus a more traditional option.”

Khan used some of the funding to pay for more advertising, but his main goal is to host a conference.

“One of the things that I’m hoping to focus on is a conference for diversity and inclusion,” Khan said. “So it’s a focus on bringing folks together that are interested in this work and learning about what the local challenges are and how we can address them and what is working. … I’m hoping that (the conference) won’t be too costly for folks, so this loan will certainly help with getting me started in making that possible. It has helped already.”

For Jalali, the program also is valuable as an indication of the opportunities available to immigrants in Maine.

“Bringing some money into the state is always good news, and supporting our new neighbors who have been displaced by wars and famine and persecution,” Jalali said. “So, it is good for Maine in a state where we’re dealing with an aging workforce. We need more immigrants, and can (this program) become one way of attracting new immigrants?

“Can this be a way that some immigrants in Vermont, New Hampshire, Massachusetts, will look at Maine and say, ‘Well, that’s a great state to go and start a business?’ This will be really good for us in the long run to attract more businesses (and) more young persons (who are) skilled, educated and motivated to come and add to the richness of our community.”

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