Thumping dance music rattled her Huntington Park fitness studio, as Celia Rivas ran her students through a circuit of aerobics, weights and spinning.
Originally from El Salvador, Rivas has a passion for keeping other immigrant women fit.
"My part is doing the exercise," Rivas said. "Their part is to eat healthy."
But this studio almost didn't happen. A divorce had left her with credit card and car payments she couldn’t make on her own, destroying her credit score.
At a time no other banks would consider her for a loan, she learned through an acquaintance about a non-profit microlender called Grameen America which was offering $1,500 to entrepreneurs.
"I was like, no, [there] has to be a catch," Rivas said.
Helping would-be entrepreneurs
Grameen founder Muhamad Yunus pioneered the practice of offering small business loans to poor villagers in Bangladesh with no credit - and won a Nobel prize for his efforts.
Grameen came to the U.S. in 2008, as the recession began to grip the country, first setting up branches in New York.
It expanded to LA in late 2012, and has since lent $4 million to more than 2,000 women in Los Angeles.
This week, the non-profit announced a major expansion. It plans to provide $650 million in loans to about 90,000 women.
"That would be over 10 percent of women in poverty in Los Angeles," said Grameen's president and CEO Andrea Jung. "That would be our dream goal."
Other microlenders in the U.S. offer bigger loans to more people. But Grameen is unique by requiring peer support.
Borrowers must join a group of five women who meet weekly to repay the loan officer. If each group member pays on time, everyone in the group will qualify for larger loans. That’s helped result in a 98 percent repayment rate.
The non-profit won admirers, like Antonia Hernandez, president of the California Community Foundation. Her group committed $2.5 million to help Grameen expand into LA County.
"This is a very entrepreneurial place," Hernandez said. "Just go down into the San Gabriel Valley and you see all the small businesses that have been thriving with the Latino, Asian community."
Maribel Pulido recently borrowed $1,500 from Grameen to expand her party supply business. She rents tables, chairs and jumpers.
"I want to get another two jumpers because the one I have is too big," Pulido, 29, said. "And I want to get a water slide jumper."
She was one of 30 women at a meeting Rivas, the fitness studio owner, hosted recently. Six peer groups were there, talking and paying the loan officer sitting at the head of the room.
Pulido handed over $63 — $60 for the loan and $3 for the interest.
The annual interest rate is 15 percent. That's higher than most small business loans, which are typically in the single digits. It's far less than triple-digit rates charged by payday lenders, which for some of the women here, would be the only other option.
Grameen, which is a non-profit, uses the interest to make more loans.
Pulido said the rate seemed fair.
"This is going to help me buy the jumpers in cash," Pulido said. "And I don’t have to ask nobody to lend me money.”
Grameen said its borrowers are getting a $2,500 income boost with each loan.
But there’s debate as to whether microloans will catapult them into the middle class.
Many of the women at the Huntington Park meeting said they used the loans to sell housewares and cosmetics.
Rivas led the group in a chant of encouragement.
"Disciplina. Uninad. Trabajo duro es clave al éxito," the group said in unison in Spanish. (Discipline. Unity. Hard work is the key to success.)
Yan Tang, a public policy professor at the University of Southern California, said microloans provide "an income supplement" to borrowers.
"They might not develop a business that would enable them to make a full living salary," Tang said.
But Tang sees value in the financial education Grameen provides.
"They try to help the borrowers to develop some credit history and assist them in opening a banking account," Tang said. "Some people say that produces a more comprehensive package in helping the borrowers."
Rivas said she can’t depend on the fitness studio as her sole source of income just yet. She sells insurance to make ends meet.
But she’s motivated to keep growing her exercise business. The Grameen loans have allowed her to buy everything from stationary bikes to kettelbells. She wants to buy the building that houses the studio.
"It’s not easy," Rivas said, "but it’s not impossible."