CIE Spotlight: Boosting Minority-Owned Businesses in Jackson, MS Through Microlending

By:

Samantha Pedrosa

July 25, 2023 - (4 min read)

Jackson is Mississippi’s destination to eat, shop and be entertained. From the cozy neighborhood cafes to innovative new startups, the entrepreneurial ecosystem within Jackson is a showcase of what residents can create when given the opportunity. Now, the city is working to place equity at the forefront of economic development and, in the process, expand entrepreneurship opportunities to more residents of color.

According to the U.S. Census, Jackson’s population is predominantly African American, however, this population makes up less than 40 percent of business owners within the city. To bring parity to their small business ecosystem, Jackson has enlisted the help of NLC’s City Inclusive Entrepreneurship (CIE) program to create a microlending platform to provide financial assistance to businesses that have difficulty accessing loans through traditional lenders.

Accessible Microlending for Small Businesses

Jackson chose to create a Kiva Hub within its newly renovated Metro Accelerator center.

By utilizing Kiva’s microlending program, the city aims to provide capital opportunities to entrepreneurs, particularly those in minority communities, through social underwriting that considers factors beyond credit scores. Residents who need financial assistance to start or scale a business are welcomed into this program with the ability to borrow interest-free loans of up to $15,000 without credit checks. Partnering with Kiva allows the city to connect entrepreneurs with a network of 2 million lenders worldwide, facilitating inexpensive microloans and fostering community involvement. The goal is to promote diversity and prosperity within Jackson’s business community while empowering residents to support local businesses and drive economic growth.

According to City of Jackson Development Assistant Manager Michael Davis, the city chose Kiva’s microlending program because it will “provide an opportunity for us to have more minority-owned businesses in our minority communities. So that people that are in those communities have access to those services.”

Also within the Metro Accelerator, the city will offer comprehensive wraparound services for small businesses including: a 10-week entrepreneurship curriculum, one-on-one guidance, fundraising tools, and more. Jackson is utilizing the accelerator model to ensure quick economic growth that is beneficial to residents. See chart below for an overview of what Kiva offers versus what the City of Jackson provides.

Kiva Offers	Metro Accelerator Offers
Systems Access Providing access to the back-end databases to track lending progress. Facilitation of a low-cost underwriting and loan approval process.	Boots on the Ground Employment of a Capital Access Manager (CAM) who will review borrowers’ applications and support entrepreneurs who are part of the program.
Training and Onboarding Offer resources, marketing materials and tools to promote the Hub to partner organizations and entrepreneurs.	Ecosystem Building Raising awareness of the program through collaboration with local partners
Global Lending Access to capital is funded by more than 2 million lenders across the world.	Local Lending Community buy-in for residents and organizations to participate in helping a local business.
Impact Data Consistent reporting on the loans progress to goal. Fundraising resources for borrowers.	One stop shop Providing wraparound services for business owners and establishing long-term support for borrowers in a centralized location.

Strengthening Businesses Through Strategic Partnerships

In establishing the Kiva hub within Metro Accelerator, Jackson has begun to nurture community relationships that help the program expand into the greater metro area. While they have a partnership with the Mississippi Small Business Development Council, the city is working toward promoting the accelerator with various Chambers of Commerce in the area. “Not only do we want to focus on Jackson, but on the county itself, there’s a large minority population so we want to partner with Chambers that are in our outlining areas to be able to expand the footprint of this product that we have,” says Davis.

Initially, there were challenges when the city first approached partners with the idea of using microlending to support businesses. As the city begins to get buy-in from community organizations, businesses and residents, it is important to explain how microlending works. By informing community partners the city is making headway into showing how the hub will provide economic development that is beneficial to the community, local organizations, and small businesses. Visit nlc.org/membership to learn more about CIE and other programs like this you can join.

This blog is part of a series highlighting NLC’s City Inclusive Entrepreneurship Network. Cities in the network have committed to implementing new policies, programs and practices that increase economic opportunity for residents through small business ownership and entrepreneurship. In April 2023, Mayor Chokwe Antar Lumumba of Jackson, MS, committed to building a platform for microlending to serve entrepreneurs without access to traditional finance.