The Lakota Fund is a private nonprofit community development financial institution for the Lakota people of the Oglala Lakota nation, in southwestern part part of South Dakota. The Fund operates out of the village of Kyle, SD, which is located in the geographic center of the reservation. The Lakota Fund was a project of the First Nations Development Institute of Falmouth, Virginia. On Dec. 6,1992, The Lakota Fund had a separation ceremony and the Fund is now a community owned not-for-profit organization.
The Fund was started in 1986 and has made over a million dollars in loans to almost 300 tribal members to develop small businesses and microenterprises through its two lending programs. Average loan to date is about $3,600.
The Lakota Fund was started in answer to a need for capital and technical assistance to help in stimulating the private sector of the Pine Ridge Reservation. At the time the Fund was organized, Pine Ridge had less than 40 small businesses in an area of roughly two million acres, with a population of about 22,000. Most of these businesses were owned by non-Indians. Some $74 million dollars was flowing off the reservation yearly to neighboring towns because of the lack of a private sector. There are no banks on the reservation and two of those closest to the reservation have been charged with discrimination in lending in the past three years.
Loans are available through two lending programs, the Circle Banking Project (CBP)and TLF Small Business Loans. CBP provides an opportunity for both lending and savings to people who otherwise have little access to credit or savings institutions. This program allows 4-6 members of a community to join together in a "peer" lending group. After five training sessions, the circle is certified and the circle members decide who will receive the first loans amounting to $400-$1000. The collateral for the loans is the circle member's commitment to training and as co-debtors for other members. Subsequent loans are dependent on successful repayment and regular savings deposits are made as individual members and as a group.
Many of these activities are home-based and although loans are small, the rewards have been able to increase their incomes and create some financial stability in their households while increasing their business and personal development skills. Circle banking is providing the entry point for many into business and economic development. The Lakota Fund small business loans are utilized primarily by individuals who are operating small formal businesses or start-ups with a feasible business plan. These loans are up to $25,000. People just starting in business, must attend a seven-week training course conducted by the staff of the Lakota Fund. Ongoing technical assistance is provided. The Lakota Fund Arts and Crafts marketing program has evolved out of the Circle Banking Project. Over 75% of Circle banking members were arts and crafts producers and the marketing program developed out of special technical assistance geared specifically to this business sector. Many producers had not considered themselves "in business" and the marketing program provided an opportunity to introduce basic business concepts in an appropriate and relevant framework. The marketing program offers training, sells products retail and wholesale for produces, operates a supply bank, and makes connections for local artists. As the Lakota Fund looked to expand its services in the Pine Ridge Reservation, the housing crisis in the Reservation presented itself as a way to strengthen and stabilize communities, create employment opportunities, and as a way to generate revenue for the Lakota Fund. The Fund is developing a ten-unit pilot housing project, the Eagle Nest Homes in Wanblee, SD. This project is designed to empower homeowners on the Reservation and remove them from a housing system which encourages dependency and hopelessness. The Lakota Fund , once again, will be in the cutting edge of private housing development, which is the future for Reservation housing. The Lakota Fund also had the opportunity this year to move its operations into the Lakota Trade Center, a 13,000 sq. ft. facility located in Kyle, which houses the Lakota Fund offices, a tribal business information center (TBIC), arts and crafts marketing program, and rental space for several businesses. The Trade Center not only allowed the Lakota Fund and its programs a beautiful and spacious work environment, but is a symbol of the efforts and achievements of this 10 year old institution. The staff and board have witnessed first hand successes and believe that long-term social change will also be brought about by the Lakota Fund. Because of its success, Lakota Fund has become a model for many other Indian and non-Indian communities.
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