‘Kinship’ Loan Program Helps Native Entrepreneurs Harmed By Pandemic

Jul 9, 2020

The Navajo Nation has been enforcing stay-at-home orders, curfews and weekend lockdowns for months to try and slow the spread of coronavirus. And that’s presented a challenge for artists, vendors, and small businesses on the reservation that rely on tourism and don’t have online stores. A business incubator called Change Labs is offering up to $5,000 loans to Native entrepreneurs on the Navajo and Hopi Nations to help them cope with the pandemic. KNAU’s Melissa Sevigny spoke with Change Lab’s Jessica Stago about the unusual loan program based on the idea of ‘kinship lending.’

Credit Deidra Peaches, Change Labs

So businesses on the Navajo Nation were already facing challenges before the pandemic hit. Can you talk a bit about some of those challenges and how things have changed in recent months?

Literally almost all our all of businesses were almost close to a complete shutdown, and still are in that state right now. Most of our businesses are on the reservation, and with the reservation still going on lockdown every weekend … they just don’t have the opportunity to even do business or even think about when they can start opening up their business…So most of our businesses are very small micro-businesses, their markets are the people who are in their communities. Some of the artists that we work with are looking to try to transition to an online environment, but even that’s really difficult when you don’t have access to high speed internet…. Everybody’s struggling with those things, and then also just the difficulty of being in the community that’s going through this at the same time.

Talk to me about this loan program that Change Labs has set up, and how is that going so far?

It was originally designed to provide start-up funds to our business incubator graduates. What ended up happening once COVID hit was, we decided, let’s open this up for the community. It’s designed as a character-based lending program, which is different from a traditional micro-lending program or any loan program. We don’t ask for credit report, we don’t look at credit score, the loan decision is based on our own relationship with these businesses who are in our community. So that’s in a nutshell how we came up with Kinship Lending.

Can you tell me about what difference you’ve seen these loans make in the community so far?  

One interesting story is a gentleman who is a rodeo contractor, he contracts his bulls for these rodeos, and since rodeos were canceled through the summer, he experienced a loss of income and he needed to pay for feed to feed his animals, because he had no income. That was something none of us had thought about but we were glad to help him, because he would have had to sell his bulls, which makes it a lot more difficult to start up a business after that….One of our loan applicants is actually a medicine man. But he also raises sheep. What we wanted to spend the money on was to fix his vehicle because he needed to travel more to reach out to more people and take care of his sheep.... He definitely is somebody that would never be able to access any other kind of funding…. There’s so many other stories about: people had big plans… and it just seems so unfair that just when Native businesses seemed to be on a roll, there was a buzz around Native entrepreneurship, and right it’s just—it’s still there but everybody’s hands are tied right now, it’s really difficult. I’m really glad that with Kinship lending we can provide some hope.

Jessica Stago, thank you so much for speaking with me.

Thank you.