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Betting on Texas Women: Latina Entrepreneurs Gain Capital—and a Community

It’s Saturday at the Austin flea market, and Yolanda Perez, 55, is doing brisk business selling parakeets, canaries and other birds, along with their colorful, intricate cages. Commerce is returning after the pandemic slowdown, kickstarting her dreams again, and she credits in no small measure JUST, a nonprofit working to close the racial wealth gap by investing in Texas Latina women typically excluded from economic opportunity.

Before the pandemic, a loan from JUST helped Ms. Perez expand her business, buying both more birds and more cages. “Then the flea market shut down for three and a half months and I couldn’t sell a thing,” Ms. Perez says. “I’m used to starting again from zero, but I needed a little more time to repay my loan.”

The JUST team “were flexible and worked with me, and I can’t emphasize enough how grateful I am,” Ms. Perez said. “Other lenders don’t care if I eat or lose my apartment; they just want to see my payment land in their account. JUST is different. They truly support women.”

This flexibility in working with borrowers is just one of the qualities that differentiates JUST, whose model was inspired by the Nobel Peace Prize-winning microfinance model pioneered by Grameen Bank, founded in Bangladesh, which uses a human-centered approach and trust-based lending to enable individuals to lift themselves out of poverty.

The JUST team made one transformational innovation to the Grameen Bank approach: instead of being a financial institution serving the community, it is both led and owned by its clients. Through an eight-week program, entrepreneurs become business leaders who form small groups, approve loans to one another based on peer trust, and hold each other accountable. The results are impressive.

We Want to Change the Story

Since its founding in 2016, JUST has lent more than $7 million dollars, with a default rate of .7 percent, compared with the commercial delinquency rate of between 1-2 percent, with loans that fill the gap for borrowers who need less than $25,000. The first loan is $750, and once repaid, borrowers qualify for larger amounts in a stepped-up process.

CEO Steve Wanta meets with members of his JUST team

“Instead of us policing the loans, we focused on how to create a transformational community that unlocks the capital,” says Steve Wanta, who became JUST’s President and CEO after 10 years of work in microfinancing as the Global Program Director for the Whole Planet Foundation.

“In traditional lending, the power sits with those who have the money. We want to change the story,” Wanta says. “We don’t check credit scores and the loan application is very simple. Our role is creating practices and policies that allow us to say yes 100 percent of the time, and at the same time, recover nearly 100 percent of the capital. We’re focused on people who are typically invisible in the system.”

“Our higher purpose,” Wanta says, “is to create a more just world where people can live with less stress and more joy.”

It’s a model that is ready to scale. Through a grant from The Rockefeller Foundation, JUST, which began in Austin and Dallas, is expanding its work to Houston and El Paso.

“JUST builds community by providing financial access to those who are intentionally excluded from the system. We’re proud of JUST as a grantee of The Rockefeller Foundation Opportunity Collective. Partners across all 12 of the locations are learning from JUST’s innovative work,” says Brett Mons, Manager, US. Equity and Economic Opportunity Initiative, The Rockefeller Foundation.

Yolanda Perez sells parakeets, canaries and other birds at the Austin flea market (photo courtesy Carola Guerrero)

Ultimate Goal: Building Generational Wealth

Ultimately, Wanta says, JUST wants not only to lend Latina entrepreneurs money, but to help these women materialize their dreams, find community on the way, and ultimately create generational wealth. “Money matters,” he says, “and it’s not enough. And yet, money matters.”

The racial wealth gap has been well documented and yet is persistent, often because of a lack of access to capital. Latest studies show the median wealth for White families is $188,200, while for Latinx families it is $36,100 and for Black families, it stands at $24,100.

Even as Latinas have entered the workforce in record numbers – now with more than 12 million workers – they continue to face the largest wage gap among women. Latinas in Texas are typically paid just 45 cents for every dollar paid to White, non- Hispanic men. And the wage gap affects Latinas at all levels, from low-wage workers to executives.

Around half of Latina mothers are key breadwinners for their families. More than three million family households in the United States are headed by Latinas,  and 30.5 percent of these households live below the poverty level, compared to 8.6 percent of all U.S. households, according to a fact sheet published in March of this year by UnidosUS.

JUST launched at a time when 42 percent of Texan households, including over half of Black and Hispanic households, could not afford basic costs of living despite having employment.

Late With a Loan Payment, But Supported

One hallmark of JUST, with its focus on community, is that it treats borrowers as real people. Egda Ortega, 48, who resells clothing and runs a billboard business with her husband, had just received her first loan when she found out she was pregnant with her fifth child. On top of that, the pregnancy was deemed high risk. “I was in shock,” she said. “I wanted to focus on work, and now I couldn’t.”

Angélica Sánchez stands in front of her own nail salon, a business she began with support from JUST

JUST worked with her to decrease the amount of each repayment installment and increase flexibility on the timing. “No one was threatening me, no one was pressuring me,” she says. “It was a big relief.”

When the pandemic hit, she and her husband delivered pizzas with the truck they’d bought for the billboard business. It helped sustain them. She’s now repaid four loans and taken out her fifth, for $4,750.

She says the entrepreneurial group model JUST uses is very effective. “We get to know and to trust one another, and we can offer support if someone in our group misses a payment.”

Angélica Sánchez, 49, studied podology in her hometown of Monterrey, Mexico, and when she arrived in Texas, she made a living by doing pedicures and manicures in salons. But from the start, she had her own approach to foot care, and she dreamt of having her own business. “Money is one of the first obstacles you have as a small business owner,” she says. It was especially true in a country where she was starting over from scratch.

That’s when she discovered JUST. “I really liked how JUST gave women the opportunity to grow and to accomplish their dreams. For me, it was very impactful how they trust you without knowing you. I invested my first loan in pedicure materials. I used my second loan to buy a professional pedicure chair…Between the second and third loans, I was able to rent my own space. This is when I really started offering my clients quality service.”

Ms. Sánchez continues to meet weekly with her JUST group of six women entrepreneurs. “We gather every Monday at around 8 a.m. Our group meetings are supposed to be an hour long but we always end up staying there more than an hour…We plan, we talk about our goals, share our experiences, we all learn from each other. If one has a question about a permit, someone knows how or where to get it, or they know someone who knows. It is the best way to start our week, motivating each other and setting clear goals.”

Ms. Perez credits JUST with giving fuel to her deepest aspirations. “I want to save money for a house, and in the future, I dream of having my own store where I can sell not only the birds and cages, but also sweaters and quilts,” she says. “I also plan to keep supporting other women, because it’s important that we help each other climb the ladder.”