Lending Circles Breaks the Common Challenges for Individuals Joining the Economic Mainstream

Photos provided by ECDI

Almaz Bahta wanted to create her own way. As a refugee from Eritrea, a tiny country located on the horn of Africa, she had a dream of starting a business in the U.S. But with no credit history or financial knowledge, she had few options. Bahta learned firsthand the challenges of coming to a new country. The credit history she created in Ertirea did not relocate. Just like her journey to the U.S. was a new beginning, so was her credit history. 

Everyone needs credit history to secure housing, purchase a phone, buy a car, etc. An individual’s credit scores drives their ability to move forward in day-to-day life. Two years ago, Bahta joined Lending Circles – a program inspired by a concept called Rotating Credit and Savings Association (ROSCA). Lending Circles is a platform for refugees and immigrants creating a positive impact on credit history, overall family income, and self-sufficiency. 

Managed by ECDI, Lending Circles gave Bahta ongoing small business coaching, a chance to build credit and a loan to start her business. ROSCAs are informal groups of up to 25 people who meet weekly and each member contributes a set amount of cash to a communal “pot” of money. At the end of the month, one member withdraws all accumulated funds for that month to use it to start a business or purchase an asset. This continues until all members have had a turn at the monthly withdrawal. ROSCAs are traditionally used in many developing nations or among immigrant groups in the U.S.

At ECDI, the Lending Circles program is a way to introduce new refugee and immigrant populations to lending in the U.S. with a familiar model (ROSCAS). Lending Circles combines small business lending and training for entrepreneurs. Self-selected group members meet weekly to discuss their business operations. Each group member receives up to $2,000 through an interest-free business loan that is repaid over 12 months. Training and technical assistance are the other hallmarks of Lending Circles – participants receive small business development support during the entirety of the program.

ECDI’s Lending Circles program is designed to address the following challenges:

  • “Credit Invisibility”—lack of financial history in the U.S.
  • Preclusion from traditional financing due to religious beliefs
  • Limited access to networks of like-minded entrepreneurs 
  • Aversion to independently engaging with financial institutions
  • Limited skills in small business
  • Difficulty navigating complex systems of laws and regulations

Sifa Riziki, a refugee from Congo, arrived in the United States on May 4, 2012 with her husband and three children.

“When we arrived, it was so hard. I didn’t’ know how to say hi and learning English seemed impossible,” Riziki says. “How do we go shopping when we have no way to communicate! No way to earn money, and the little support the Government paid for rent was not enough to survive. I started this business out of survival. My family needed me to do something to survive.”

Riziki began her small business, Ebenezer Trading, through Lending Circles with a $750 loan. Riziki wanted to bring dried fish and fruits, popular Congolese ingredients, to Columbus. The seed capital she accessed through Lending Circles helped launch her business into international grocery stores throughout the city, increasing gross profit margin by 67%. With the business continuing to grow, Riziki recently completed a loan application for $20,000 as she recently began importing women’s hand-dyed clothing from Mali.

As President of the Women’s Congolese Association, Riziki spends hours showing women how to survive in a new country. She assists with simple but very important tasks like how they can dial 911, book appointments to see a doctor and engage with the community. 

ECDI has had a strong commitment to serving the immigrant community since its inception in 2004. More than 33% of our clients have been immigrants, and 15% have been refugees and asylees. To date, ECDI has disbursed more than $5,000,000 through over 800 loans to immigrants and refugees. 

For more information about the Lending Circles program and how to get involved, contact Aminata Soko via email at [email protected]

For more information, visit ecdi.org.

This mutli-part sponsored series highlighting ECDI’s work in Columbus is presented with paid support by ECDI.

Since 2004, ECDI has assisted Ohio’s entrepreneurs through its one-stop shop business services model, suited to meet the needs of all entrepreneurs, regardless of what business stage they’re in. From providing capital to entrepreneurs looking to expand their businesses, to providing focused, business-specific educational opportunities to enhance entrepreneurial skill sets, ECDI works with their clients to meet their unique needs. Whether assisting a new client with a business concept or an accomplished entrepreneur opening a fifth location, ECDI’s “never say no” approach has allowed over twelve thousand entrepreneurs to take advantage of the services it provides. Visit ecdi.org today to learn more.