Accion Opportunity Fund's Latest Report--Ripple Effect--Finds Macro-Benefits in 16,500+ Micro-loans to Underinvested Small-Biz Borrowers in California, Texas, Florida, New York, and Georgia

SAN JOSE, Calif., May 15, 2024 /PRNewswire/ -- Accion Opportunity Fund (AOF) published research today showing the macro-economic benefits of nonprofit micro-lending. The fourth edition of Ripple Effect analyzes the direct and indirect impact of the $628 million AOF lent between 2016 and 2023 to 16,500 small business owners, more than 90% of whom are women, people of color or low-income borrowers living in California, New York, Florida, Texas, and Georgia.

On average, every dollar AOF invested in traditionally disadvantaged small business owners during this period created $2.05 in economic activity in these states, its report said.

"A small business loan isn't just a one-time capital injection," explained Dr. Joshua Miller, AOF's Vice President of Research and Policy. "It enables a small business owner to pay their suppliers, cover employee wages, and more?catalyzing greater downstream spending that ripples across all parts of the economy."

AOF goes beyond lending. It provides entrepreneurs with resources ranging from coaching to networking opportunities. AOF discloses all pricing terms and conditions upfront and works with borrowers having difficulties paying. Leveraging philanthropy and government grants, AOF offers rates lower than many for-profit lenders in loans ranging from $5,000 to $250,000.

AOF's report, using econometric models, breaks down how each state specifically benefited:

• In California, AOF lent $551 million to small business owners throughout 52 counties, adding more than $1 billion to the state's economy.
  
  
• In New York, AOF lent $25 million in 27 counties, spurring more than $44 million in new economic activity in the state.
  
  
• In Florida, AOF invested more than $22 million in 46 counties, adding more than $45 million to the Sunshine State's economy.
  
  
• In Texas, AOF invested nearly $17 million across its 59 counties, adding nearly $40 million to the state's total output.
  
  
• In Georgia, AOF invested $9.8 million in 51 counties, adding more than $21 million to the state's economy.

"There's been an explosion of online lenders over the last decade, many of them are making predatory loans, charging exorbitant rates, particularly for small businesses owned by women and people of color," explained AOF's CEO Luz Urrutia. "Our research shows there's a critical role for Community Development Financial Institution lenders like us. Ripple Effect shows nonprofit CDFI lending to underinvested business owners creates widespread economic gains extending far beyond the immediate borrowers. We want our research to catalyze more responsible lending to entrepreneurs in overlooked communities."

On May 17th at 2:00 p.m. ET, AOF will host a webinar to discuss these findings and engage in conversation with attendees. Register here.

Accion Opportunity Fund works to advance economic mobility for low-income communities, women and people of color who own small businesses through affordable capital, knowledge resources, networks, and policy. Accion Opportunity Fund Community Development is the lending arm of Accion Opportunity Fund, California Finance Lender license #6050609. More at aofund.org.

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SOURCE Accion Opportunity Fund