http://www.wsj.com/articles/loan-program-h... Falah Yaqoob, who cooked for U.S. troops in Iraq, said he lost everything before fleeing his homeland and coming to America in 2010 as a refugee.
But thanks to a $10,000 loan from a refugee resettlement group to help him open a small restaurant in Tempe. Ariz., Mr. Yaqoob said he and his family are on the path to succeeding in their adopted country.
As the U.S. prepares to take in thousands of Syrian refugees in coming months, the International Rescue Committee, one of the nine nonprofit organizations tasked with resettling refugees, has been testing a novel approach to helping refugees integrate: providing them with loans to start businesses.
Fleeing conflict or persecution, refugees who arrive in America—about 70,000 came last year—often have little money, limited English and university degrees that aren’t recognized in the U.S.. But many have entrepreneurial aspirations.
Mr. Yaqoob, a 42-year-old who has been running a grocery store, is using his loan to renovate a space and buy furniture and supplies for a café near Arizona State University, where he plans to serve kebabs, falafels and other Middle Eastern fare. His wife and brother will work alongside him, and he plans to hire a few employees, he said.
“I am looking for the American dream,” said Mr. Yaqoob, who has a 9-year-old son and another child on the way. “I want to do something special with good food, maybe a franchise later.”
The International Rescue Committee is to announce Wednesday that its microloan program has received accreditation from the U.S. Treasury, which will enable the program to expand nationally.
Kasra Movahedi, the IRC official who oversees the microloan program, says its mission is to help refugees “access credit affordably and move up the economic ladder.” Closing fees for its loans are low, he said, and the annual interest rate is fixed at 7.25%. By 2020, the IRC hopes to have $4 million worth of outstanding loans, averaging $6,500 apiece.
Studies have found that immigrants start businesses at a higher rate than the general population. For refugees, it can be harder to start a venture because they lack a credit history to secure a bank loan.
Refugees are frequently hired in food production, lodging and other sectors that employ low-skilled labor. A crackdown on hiring undocumented immigrants has led businesses in labor-intensive industries such as meatpacking to tap refugees, who are legal residents of the U.S.
John McMicken, chief executive of Evergreen Cooperative Corp., said the firm has been hiring refugees to work in an urban greenhouse in Cleveland planting, harvesting and packaging leafy greens and herbs. Their hourly wage averages $14, plus benefits and a stake in the worker-owned business, he said.
“We have had a very successful strategy around Cleveland refugees,” said Mr. McMicken, adding that there has been “very little turnover” since he began hiring them a year ago through a resettlement agency called Us Together.
Critics say refugees, like undocumented immigrants, drive down wages of blue-collar jobs, making them unattractive to native-born workers. “No matter how high the meatpacker says the salaries will be, they will be too low for anyone other than immigrants and refugees,” wrote Ann Corcoran, who blogs against refugee resettlement.
The Obama administration’s plans to resettle 10,000 Syrian refugees among the 85,000 total this fiscal year has drawn opposition from congressional Republicans and some Democrats over terrorism concerns. Sen. Jeff Sessions (R., Ala.), chairman of the Senate subcommittee on immigration, said last month that resettling refugees in the U.S. is a financial drain “associated with long-term welfare, health care, housing and entitlement benefits.”
Demographer Ron Crouch, director of research and statistics at Kentucky’s Education and Workforce Development Cabinet, said rural areas stand to benefit from the newcomers, citing falling birthrates coupled with an aging population.
“America needs immigrants and refugees to sustain the economy,” he said.
So far this year, Kentucky Refugee Ministries has helped place refugees with more than 130 employers in the Louisville region, including United Parcel Service Inc., Amazon.com Inc., meatpacker JBS Swift & Co., manufacturing plants and hotels.
The refugees—they receive government assistance and are expected to achieve self-sufficiency in about six months—earn an average of $10 an hour, said John Koehlinger, the Kentucky agency’s executive director.
But for some refugees, the clearest path to success in America is starting a small business, which is why the International Rescue Committee has been testing its loan idea.
An early recipient of a microloan was Jean Nyirabatire of Rwanda. With $2,500 from the IRC, she bought a new sewing machine and opened a studio in her Phoenix garage two years ago, which the agency helped her register as a business.
According to her receipt book, October sales totaled $890, which supplemented her income from working full-time as a hotel housekeeper. The additional money also helps cover her daughter’s nursing school tuition.
“With this, I can pay bills and buy more fabric from Africa” to expand the business, said Ms. Nyirabatire, 58, sitting amid brightly colored dresses that she had made to order for refugees and Americans.
Posted By: Mary McGowan
Wednesday, January 13th 2016 at 11:31PM
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