From: johnson@whitewater.chem.wisc.edu (Art Johnson)
Newsgroups: soc.culture.african.american
Subject: Re: Investment
Date: 31 Dec 92 21:01:20 GMT
Organization: Physical Sciences Lab, UW-Madison

In article <3DJgwB3w165w@netlink.cts.com>  writes:
> Much has been made off an on about the purchasing power of the black 
> community, but one look around America's cities and you don't see much 
> being done with it. Not nearly enough, anyway.
> 
> So why not pool our money and let what financial resources we do have do 
> some work for us?
> 
> Several years ago, a number of specific mutual funds were formed on Wall 
> Street. These funds made it a point *not8 to invest in war-related 
> industries. They also made it a point to invest in companies that had 
> good equal-opportunity hiring records and were environmentally sound.
> 
> What is to prevent us from doing something similar for ourselves?
> 
> Whatis to prevent us from forming investment clubs of aour own, at the 
> local level first, then larger...identify well-run companies with a 
> history of equal-opportunity hiring or investment in black communities, 
> or both, and invest in those firms? 
> 
> Or pool our money to be able to make loans to people wanting to start  
uyp 
> their own businesses in black communities. Banks traditionally have used 
> "redlining" against us; with our own pool of money to invest, we can  
work 
> inside their red lines to our own advantage.
> 
> What is to prevent a block of residents, or a church, or a social club, 
> or any group of folks in the 'hood from pooling some money together, 
> buying a rundown property in the neighborhood, then fixing it up and 
> either renting it or selling it?
> 
> And there are doubtless other ways we can put some of that legendary 
> "buying power" to work for something other than buying cancer sticks and 
> "8-ball." 
> 
> What are those ways?
> G.
> 
> --
> Gregory Alan Gross      Welcome to life, where no good deed goes  
unpunished.
> San Diego Union-Tribune         (619) 293-1270 (voice)
> P.O. Box 191                    (619) 293-1896 (fax)
> San Diego, CA 92112-4106        galan@netlink.cts.com (Internet)

     One possible way to help people who want to start up a small  
business, but don't have the modest start-up capital, is to privately set  
up a program like one currently existing in Bengladesh. In Bengladesh,  
money is lent to help people buy things like sewing machines, or looms, or  
a good set of hand tools, or a personal computer and appropriate software;  
things that are necessary for starting up a small business. The borrowers  
in a particular village form a group, and assist each other in forming  
social and business contacts, in the day-to-day routine of running a  
business, and in making sure that their loan payments (which are  
reasonable) are made on time. The success rate in lifting very poor people  
out of poverty has been phenomenal, and there is virtually no default  
rate, or even tardy payments.

     I think that a similiar type of program in the U.S. might very well  
produce similiar results in the black community. Many people have a good  
idea for a business, one that, at the very least, will lift themselves and  
their family out of poverty. But they can't act on it because they don't  
have that $500 or $1000 or $2000 to get the business off the ground. An  
organization specializing in making loans of this size would be a big  
help.

Arthur Johnson
johnson@whitewater.chem.wisc.edu 
Newsgroups: soc.culture.african.american