OTTUMWA — Small-time entrepreneurs may have a new way to get their businesses going after Wells Fargo and the U.S. Small Business Administration announced a $55,000 grant for microfinancing.

Microfinancing is an approach similar in some ways to the traditional business loans. But the amounts are usually significantly smaller, and the programs are open to people who might not qualify for traditional loans. A similar program began in Des Moines in 2014, serving about 300 low-income entrepreneurs, mostly women.

Alomgir Hossain, the Solidarity Microfinance program director for Iowa Community Capital, said progress in Ottumwa over the past several years made the community an attractive option for expansion of the program in Iowa. The goal is establishment of an Opportunity Zone, an area in which these potential business owners can get the help they need to make their companies a reality.

Solidarity Microfinance’s website said the initiative has given more than $1.7 million in loans. The repayment rate since January 2015 is 99.72 percent. Microfinancing began as a set of ideas used for lending in underdeveloped countries, but the basic guidelines have proven adaptable to many areas.

Himar Hernandez, the state assistant director for Iowa State University’s Extension and Outreach, Community and Economic Development, said the opportunity is a good one for people who are thinking about starting a business. And the program has room to grow.

“We are very excited that Ottumwa has been selected of all the communities in Iowa. We are ready for this opportunity and are already looking to hire a local director as well as bringing some other local partners into this opportunity,” he said.

Matt Milner can be reached at mmilner@ottumwacourier.com and followed on Twitter @mwmilner

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Managing Editor

Matt Milner currently serves as the Courier's Managing Editor. Milner is a trained weather spotter and is usually outside if there are storms. He joined the Courier in 2002.

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