FEATURES/Cross Border | Jul 13, 2012 | 8064 views

The Ultimate Neighbourhood Bank

The Indo-American community in Edison, New Jersey builds wealth the old-fashioned way, financing each other's businesses
The Ultimate Neighbourhood Bank
Image: David Yellen for Forbes
Some of the benevolent godfathers of New Jersey’s Little India (left to right): Dilip Patel, Dipak Shah, Mahesh Shah, Piyush Patel, Bipin Patel and Manher Shah


nearly mile-long stretch of Oak Tree Road in Edison, New Jersey is known as Little India for good reason: Every single store there—grocers, clothing retailers, restaurants, jewellers and even an auto repair shop—is owned by an Indo-American. “Everyone from India knows about Oak Tree Road,” says Bipin Patel, the 55-year-old founder of Speedy Mart Food Stores, which operates 35 convenience stores in New Jersey, New York and Pennsylvania. “It is as well known as Calcutta.”

Patel sits at a table in a restaurant on Oak Tree named Chowpatty. It is the nerve centre of the street, where the computer screen is fixed to’s cricket page, traditional Indian dishes like poori and bhel are washed down with a sweet lassi, and the power brokers of Edison’s Indo-American community meet to discuss their particular brand of alternative investing—in their own community.

With Patel are three other business owners: Dilip Patel (no relation), a 57-year-old liquor and convenience store owner; Mahesh Shah, a 62-year-old pharmacist who owns a string of drugstores in New York and New Jersey; and Manher Shah (no relation to Mahesh), a 73-year-old accountant. All emigrated from India 20 or more years ago and scratched their way up the ladder. And now, with the money they’ve made and the expertise they’ve gained, they’re helping more recent Indian immigrants start their own businesses.

Together these four men have helped fund (sometimes with interest-free loans) more than 200 small businesses owned by fellow Indo-Americans. Doing so, they believe, makes for a stronger neighbourhood and a thriving downtown area, and perhaps creates a bit of good karma. “It is better than investing in the stock market,” says Mahesh. “It lifts everybody up. It’s better to help somebody to be independent so he can support himself. And maybe in the future someone will help you.”

It is, in some ways, the antithesis of , where return-hungry investors make high-interest-rate loans to anonymous strangers based on their credit scores.

Bipin, Dilip, Mahesh and Manher prefer the old-fashioned practice of investing in people you know—often by face and name but at least through common cultural norms. Craig Galbraith, a professor at the Cameron School of Business at the University of North Carolina Wilmington, who studies ethnic economies, calls it “social capital.” Says Galbraith: “In economic terms it means the unique cultural attitudes and well-understood behaviours within an ethnic community that encourages people to do business with each other, almost like members of a club.”

The use of social capital is fairly common in immigrant communities, according to Miliann Kang, a professor at the University of Massachusetts Amherst. Sometimes there’s a monthly pot that a group of people pays into. Each month a different participant takes home the pot, using it to fund a business, education or even a wedding.

In the Korean immigrant community these pots are called kyes. In the Mexican community, tandas. The Vietnamese refer to them as hos. Says Kang: “The reason they are so popular is because many in these communities don’t have access to bank loans. The funding functions as the glue that holds these societies together and as a way of helping each other out. There are very few things one person can accomplish alone.”

The Indo-American entrepreneurs of Edison feel the same way but have gone about it in a different manner: They individually help out others in the community. And together, in 2007, they created a federally insured community pot. Bipin helped raise $20 million from 70 primarily Indo-American business owners in the Edison area to start the Indus American Bank in nearby Iselin, New Jersey. The bank now has $200 million in assets and four branches. It has been profitable for the last two years, netting $257,000 in 2011. The bank makes loans to younger members of the community who might not qualify for financing from a big bank. Established community members vouch for their creditworthiness.

This article appeared in the Forbes India magazine issue of 20 July, 2012
Post Your Comment
Email Address
Required, will not be published
All comments are moderated
“ There are no comments on this article yet.
Why don't you post one? ”
Next Article in Cross Border
Like this article? Subscribe to Forbes India
Just give us your mobile number and we will get in touch with you
Most Popular
Insta-Subscribe to
Forbes India Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
click here to Subscribe Online