ReMix Ideas of Little Rock has partnered with Forge Community Loan Fund of Huntsville to pilot a microloan program for entrepreneurs in Arkansas.
Called the Imani Fund — because “Imani” means “faith” in Swahili — it will provide $5,000-$25,000 loans and free technical assistance.
ReMix’s mission is to help Black entrepreneurs start, grow and scale their businesses. The Forge fund is a community development financial institution.
“Over the past few years, I have worked closely with Black entrepreneurs, and I’ve witnessed many of their business dreams die in the bank parking lot due to low credit scores and lack of collateral,” ReMix Founder Benito Lubazibwa said in a news release. “These economic redlines have denied under-resourced business far too long. So, I am excited that we are launching this innovative loan product which is rooted in equity.”
The Imani Fund will use an uncommon underwriting process that assesses the applicant’s character and community engagement instead of their collateral. The process will also give more weight to an applicant’s potential to execute a viable business model in the future than to their past relationship with personal debt.
“Collateral, credit history, and personal capital are large features of the traditional underwriting process. These are prudent risk management assessments in lending. However, when they are paired with the historic extraction of wealth from underserved communities, the result is that these communities have been kept from traditional sources of capital,” Forge Executive Director Philip Adams said in the release. “The opportunities and outcomes fostered through the Imani Fund should provide the larger financial system with a tool to pry open lending to a more inclusive future.”
The first loan recipient is Italian ice seller Kingdom Made Treats, which will use the money to expand and for marketing.
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