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FOR 9/4 High school senior is micro finance whiz

Dougherty Valley junior creates loan program for low-income women

While many of his peers struggle to find financing for cars, phones or just a night out, 16-year-old Sai Kosaraju found funds to help others.

After watching CNBC with his father for years and picking up books on finance, Sai decided he wanted to use his knowledge to pilot a program for a local nonprofit. Working on the concept of socially beneficial finance -- using financial techniques to help society -- Sai helped fund a loan program for Women's Initiative, which trains low-income high, potential women to achieve self sufficiency through self employment.

"I was looking for a place where I could actually make a difference in someone's life," Sai said of his internship with Women's Initiative. "The interest rate of low income loans in the U.S. is really high, which I think is kind of unfair… to be kind of predatory to people who can't go to another institution and get a loan because of their social status."

To combat 18 percent interest rates, Sai teamed up with Women's Initiative's Flor de Maria Melara to create a microloan program specifically for Contra Costa County residents. Sai raised $7,600 in donations that would benefit two women at a 1 percent interest rate.

"The (money) they essentially saved would go to something better like improving their lives or putting money back into their business. Instead of defaulting on their loans, they can put it to better use," Sai said.

The loan program fit perfectly into Women's Initiative's mission of a low-cost, more personalized form of lending. Due to a lack of resources, the company had distributed very few loans over the past year and Melara said she was very pleased with Sai's initiative.

"The majority of our clients won't even qualify for a 25 percent interest credit card… or they would and that's a really expensive interest," said Melara, a financial services associate "This makes Sai's program extremely important. We want to make sure that were always providing our clients with options."

To earn money to finance the microloans -- which were distributed in $5,000 and $2,600 increments -- Sai attended holiday parties and went door-to-door with his iPad, explaining his joint mission with Women's Initiative. Most of the donations he received were $100 or less, Melara said, adding that he received matching dollars from companies.

"That's something that's always stuck with me: you need connections because people are very reluctant to give out their money," Sai said. "I wanted to stress this concept of socially beneficial finance, because I think we could achieve a lot if it got widespread recognition. Finance is a huge part of people's lives…teaching that and using financial skills to help the general public is huge."

Sai's microloans were awarded to two Contra Costa women last week, both of whom were "ideal applicants." Women's Initiative will disperse funds directly to clients who provide the nonprofit with receipts for goods purchased.

Varunee Mcgowan, the recipient of the $5,000 microloan, plans to use the money to expand and market her jewelry and clothing design business in time for Christmas. As Mcgowan and her husband are both unemployed and living on social security and disability, the loan will help her prepare for the holiday season and begin home-party or trunk show style events.

Weina Hou received the $2,600 loan and will use the money to market her solar panel and window import business. Although Hou was very successful in her native country, she didn't have the contacts or finances necessary to expand her business or continue working at the same pace.

"I really do believe that these clients are going to do well. Worst-case scenario that, if this doesn't make an investment to their business at all, they'll still be able to make a payment," Melara said. "If they pay on time, (the funds) can be multiplied to more people."

Although there are no plans for another Contra Costa-specific, privately funded microloan program, Melara said Sai's was quite successful. The loan dispersal was an amazing moment and meant a lot to everyone involved, she said.

"What he did was extremely amazing…. I can only see bright things in his future, and what's so touching about this story to me is that Sai is going to be successful in anything he does. I believe he's going to do impactful things that grow and help the community," she continued.

Sai recently completed a prestigious internship with Bank of America and will go into his senior year at Dougherty Valley High School with new leadership skills and finance experience that will translate in college.

"I think that the loan program is probably the biggest thing that helps create jobs because if a business goes into growth or hyper growth, the owner will be able to higher more people," he said, adding that the program afforded the teen "a job to me personally, the value of having a job and the skills they teach."

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