CDFIs and Nail Salons: A Partnership to Improve the Health of Low-Income Workers


We value bringing unlikely partners together to find creative solutions, which is why we’re excited to share a new partnership that explores the role of community development finance in improving the health of low-income nail salon workers. As a series of articles by the New York Times revealed, many nail salon workers face harsh working conditions that include long hours, below minimum wage pay, and severe health impacts resulting from prolonged exposure to toxic chemicals, which include cancer, miscarriages, lung diseases, and other ailments.

Here in California, Asian Health Services, a community health center in Oakland’s Chinatown, had seen these persistent health problems among Vietnamese manicurists over the past decade and formed the California Healthy Nail Salon Collaborative in 2005. One of the group’s efforts is the Healthy Nail Salon Program, which incentivizes nail salon owners to prioritize the health of their workers through both education and the implementation of safer products and practices. This recognition program, first established in San Francisco, has now been adopted by Alameda, Santa Clara and San Mateo Counties and the City of Santa Monica.

One of the most immediate ways to improve the health of nail salon workers is the use of mobile source reduction ventilation systems that improve air quality. As part of the program, participating local governments offer a limited number of rebates for salon owners to purchase these ventilation systems, but funds are often limited. The upfront costs of such ventilation systems are also a barrier to salon owners, many of which are immigrants who may have language barriers, limited credit history, and lack access to traditional small business financing.

As the SF Fed and Asian Health Services examined the issues, it became clear that community development financial institutions (CDFIs) could play an important role in expanding access to capital in order to improve the health of low-income salon workers. We reached out to Opportunity Fund and Working Solutions, two CDFIs with strong track records in providing microloans to low-income individuals, and explored opportunities for collaboration. As a result, the SF Fed, Asian Health Services, the California Healthy Nail Salon Collaborative, Opportunity Fund, Working Solutions, and the counties of San Mateo, Alameda, and San Francisco launched a pilot microloan program in November 2016 to provide the capital and resources needed for nail salons to become Healthy Nail Salons, with funding from an Environmental Protection Agency problem solving grant.

The team will develop and pilot a program that offers small business loans in the range of $2,600-$5,000 for up to 15 salons and that serves as a scalable model for expanding the Healthy Nail Salon movement—all while improving the health of nail salon workers, expanding access to credit, and strengthening small business sustainability.

The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.

About the Author
Laura Choi is executive vice president of Public Engagement at the Federal Reserve Bank of San Francisco, where she provides overall strategic direction and leadership for the Community Development, Government and Civic Relations, and Regional Business Engagement teams. Learn more about Laura Choi