Starbucks: Venti Plans for Micro Loans
Monday, October 24, 2011
The micro-lending revolution, which made it possible for community-based lending institutions to bundle together micro-donations of $25 into loans for entrepreneurs in emerging markets, is making its way to your local Starbucks. Starting November 1, if your local bank won’t give your small business a loan, you might just be able to receive financing from hundreds of thousands of everyday coffee-drinking Americans who care about bringing jobs back to their community. At over 7,000 Starbucks coffee shops around the nation, patrons will be able to submit micro-donations as small as $5, which will then be re-packaged into larger loans for worthy local businesses.
The Create Jobs for USA micro-lending plan, which came to life through the vision of Starbucks Chairman Howard Schultz as well as the support of the Opportunity Finance Network, is brilliant in its simplicity: groups of individuals, by combining their limited financial resources together at the grassroots level, can effect change on a scale that large financial institutions can not (or will not). The national reach of Starbucks, combined with the generosity of coffee drinkers willing to donate $5 or more at the same time that they’re willing to drop approximately the same amount for a Pumpkin Spice Latte, means that this new micro-lending initiative can have a real impact. In fact, according to Starbucks, every $3,000 raised through customers will create 1 new job in America. Every $5 donation has a multiplier effect, making it possible for businesses to raise $35 in total financing. At a time when small businesses help to create 50% of all new jobs in America, this means that every $5 donation could have a very real impact on the ability for communities to revitalize through new jobs creation.