Act 20/22 Investors & Grameen America Launch $16M Initiative to Help Puerto Rico’s Women Entrepreneurs
SAN JUAN – Puerto Rico Act 20/22 investors Toby Neugebauer and Charlie Hamilton announced Wednesday a partnership with microfinance organization Grameen America to support women entrepreneurs on the island. Under the terms of the partnership, the investors will fund a loan portfolio making available more than $16 million in microloans, ranging from $500 to $5,000, to low-income women business owners in Puerto Rico over the next five years.
“We wanted a proven model and Grameen’s track record of providing ‘handups’ instead of ‘handouts’ has worked all over the globe and especially in Puerto Rico. In the wake of Hurricane Maria’s massive destruction, we need to get our island home back on its feet. As I have said before, Act 20/22 decree holders have a moral imperative to help Puerto Rico,” said Neugebauer, who was co-managing partner of Quantum Energy Partners in Houston before moving to the island.
Grameen America, a nonprofit organization, founded by Nobel Peace Prize winner Muhammad Yunus, is focused on helping women who live in poverty build small businesses. Since opening in the U.S. in January 2008, Grameen America has invested more than $760 million in more than 95,000 women.
David Gough, CFO of Grameen America, said the average annual interest rate for their microloans is 18%. Their loans also do not have additional charges such as origination or late fees.
Most bank loans are 1% to 2% above the prime rate, which is 4.25% today, according to FedPrimeRate.com. It should be noted that the prime rate is reserved for the most “credit-worthy” clients, and since most of Grameen America’s clients are women living in poverty, they would not qualify for loans at this rate, if at all.
Acts 20 and 22 are designed to stimulate investment and job creation in Puerto Rico by providing economic incentives to investors who create businesses and move their permanent residences to the island.
Charlie Hamilton, founding partner of Caprock Partners with headquarters in San Juan, hopes in addition to mobilizing other Act 20/22 families, today’s announcement will result in “business leaders on the island thinking hard about how they can help the least fortunate, for the sake of all the people in Puerto Rico… I’m honored to be part of an effort to help thousands of entrepreneurs start or grow businesses that will not only provide for their families, but also contribute needed jobs to our economy.”
“After a disaster, our first priority is making sure people are safe. Then we continue to support them and help them get back on their feet,” said Andrea Jung, president & CEO of Grameen America.