Mom-and-Pop Hasidic Businesses Get Big Boost From Small Financing

Hebrew Free Loan Society Uses Third-World Tool in New York

Shop Proud: Tzvi Rosenbaum is planning to expand his grocery store in Brooklyn’s Boro Park neighborhood.
claudio papapietro
Shop Proud: Tzvi Rosenbaum is planning to expand his grocery store in Brooklyn’s Boro Park neighborhood.

By Josh Nathan-Kazis

Published July 29, 2013, issue of August 02, 2013.
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Blum’s husband, Joel, a member of the Kashau Hasidic group, works as a nurse. Her father was a diamond cutter before the diamond jobs disappeared. She herself worked at a Boro Park shoe store after graduating from a Satmar high school. Now 35 years old and a stylish mother of five, she is ambitious.

Soon after her first success selling the stranger’s garments, Blum sketched out some designs of her own, found a fabric supplier and had a run of skirts made. They sold. She was in business.

Blum’s skirts are simple. Most are gray or black with pleated fronts. At a recent show on the third floor of a Williamsburg wedding hall full of Satmar women and their toddlers, Yides Blum was displaying dozens of skirts on six or seven racks. It was the last sale before summer camp, and Blum was selling one seasonal skirt with leopard-print running down the side, a bit of flash that would never have flown at school.

Yides Blum started her business with a small loan from her family and the help of her good-natured husband, who carries her clothes racks up and down the stairs. A year ago, however, one of their children got sick, and the business suffered. Needing help, Blum found an ad in a local Orthodox newspaper, offering free business loans to the “heimishe community,” a Yiddish term connoting the Hasidim.

HFLS had placed the ad, but the copy included the name of the United Jewish Organizations of Williamsburg, a local community group run by the leadership of the Satmar Hasidic sect. Blum had never heard of HFLS, but she had heard of the UJO, and she reached out.

“That kind of opens the door for us,” said Shlomo Haft, the HFLS program officer responsible for the organization’s loans to Hasidic Jews, of the partnership with the UJO.

Haft, like the rest of the HFLS staff, is not Hasidic. Nor are the vast majority of HFLS’s financial backers. Founded in 1892 to help poor Russian Jewish immigrants establish themselves in the United States by extending interest-free credit, HFLS is today an agency of the UJA-Federation of New York.

Yet since 2008, HFLS has initiated a new focus on Hasidic businesses. The group calls it a microfinance program, an allusion to the global anti-poverty trend popularized by Muhammad Yunus and the Grameen Bank, which won a 2006 Nobel Peace Prize for their micro-lending efforts in Bangladesh.

HFLS’s program differs in important ways from the Grameen Bank: Most significantly, while most microfinance banks charge interest, HFLS does not.

HFLS, in that sense, looks less like a microfinance bank than like a gemach, the communal free loan institutions still common in Hasidic neighborhoods. Yet while the gemachs are usually relatively informal, HFLS’s process is rigorous.

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