MicroLOAN SD History
When Bill Jankow was the governor of South Dakota, he saw the need to provide small businesses in South Dakota with the opportunity to borrow money at a low interest rate – just as larger businesses were able to access through the REDI Fund.
In 1999, agreements were signed between Citibank, the South Dakota Development Corporation (SDDC) and the GOED. Citibank loaned the SDDC $1 million at zero percent interest, which, in turn, was to be loaned to small businesses through the GOED in conjunction with bank financing, at a 3 percent interest rate.
From 2001 until mid-2004, the interest rate was 5 percent to borrowers. However, in 2004, legislation was passed to allow the REDI Fund to buy the outstanding loans from Citibank. The interest rate was immediately restored to 3 percent, which is the current rate for the program.
In 2011, the SDCC purchased the outstanding loans from the REDI Fund and provided the capital for all MicroLoans. Additionally, the MicroLOAN Program
expanded its reach by providing financing to borrowers in conjunction with banks and credit unions. As of December 31, 2011, there was $3 million authorized to loan out through the MicroLOAN program.