By Michael Matza
The Philadelphia Inquirer.
Immigrants who want to open a corner store, pay for a wedding, or buy a house often turn to a “lending circle.”
Called tandas in Latin America, susu in West Africa, and hui in China, they offer pooled-risk loans from informal groups with family honor as collateral.
Repayments don’t necessarily build creditworthiness, however, because transactions are not reported to credit bureaus.
Enter Finanta, a Kensington nonprofit with a hybrid twist on old-world tradition. As a community development financial institution, Finanta manages the lending circles of some immigrant groups by reporting transactions to the credit agencies, but retaining the risks of non-repayment within the small spheres of trust.
That’s just one innovation cited in “Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow,” a study to be released Wednesday by the New York-based Fiscal Policy Institute.
Another key finding: Immigrants are 10 percent of the population of greater Philadelphia, 12 percent of the labor force, and 28 percent of “Main Street” business owners, and account for $295 million of the $1 billion earned annually by such businesses in the region.
The report defines Main Street businesses as retailers, accommodations, food services, dry cleaners, and laundries; nail salons and other personal-care services; car washes; and beauty salons and barber shops.