Building Community in Big Ways
On a sunny Saturday morning the line at P Delicia’s Bakery & Coffee shop, one of ACCION USA’s clients in Lowell, MA, strung through the brightly colored eat-in bakery. The aroma of fresh baked bread and chocolate cake was accompanied by the hum of Brazilian Portuguese. As I listened to the bustling conversation and familiar greetings from those attending customers, I was left with one word on my mind: community.
While modern technology has enhanced our ability to work and communicate across distance, there is something to be said for that one locale that draws in an area’s regulars and the occasional passer-by. Such locales contribute to building thriving communities, which can be the breeding ground for the development of relationships that are sustaining and give rise to innovation and a healthy civic participation.
In supporting our small businesses, we contribute to building healthy communities in a number of ways:
First, small businesses have the exceptional ability to provide a common interest for several individuals – be that a common space, food, music venue, product; the list goes on. Such spaces can foster the development of long-lasting relationships.
Second, small business owners have demonstrated time and again that they are committed to giving back to their communities. According to an NFIB National Small-Business Poll in 2005, 91 percent of small-business owners provided financial support and volunteer time for charitable organizations (Faris, 2005). These small business owners bring special talents to those organizations they serve!
There is much discussion today around how to get this country on a platform of sustainable economic development. A common approach to local economic development has been focused on attracting outside industry. What about providing support for small businesses? Businesses like P. Delicia not only generate substantial gross income within a community, but often employ at least one other person outside of the owner’s household (Faris 2005).
Not only did I leave P. Delicia with a pleasant taste in my mouth, but with the thought that small business owners are building community in big ways. We should be doing all we can to give them a boost as customers and fellow members of a community.
Survey Results: (Faris, Jack. “Small Businesses and the Community: Their Role and Importance Within a State’s Economy” 2005.)
They Dreamed a Dream
Like many others, I have been thinking a lot lately of Susan Boyle and her stunning singing debut on Britain’s Got Talent. When asked why she hadn’t already become a professional success at the age of 47, she replied that she had never had the opportunity, but hoped that would change with her appearance. While the audience and judges signaled that appeared unlikely, she quickly proved otherwise.
Susan Boyle’s unlikely success reminded me of Sheli and Nargiza, two ACCION USA clients in Queens, New York. They, too, seemed to have the odds stacked against them when they set out to open an Internet café in their neighborhood. Aside from facing the prospect of entering a male-dominated business community, Sheli and Nargiza lacked the credit and savings they needed to secure a traditional bank loan.
A microloan from ACCION USA enabled Sheli and Nargiza to purchase equipment and inventory so that they could open the doors of AromaNet Café, which now serves up delicious kosher cakes and sandwiches, as well as Italian and Israeli coffees. Like many microentrepreneurs, Sheli and Nargiza have become employers themselves – with six staff on hand. (On average, each ACCION USA microloan creates 1.7 jobs.)
Susan Boyle got her chance to prove herself. Shouldn’t we give additional aspiring small business owners like Sheli and Nargiza a chance by giving them access to the credit and financial tools they need to achieve success? So in the spirit of viral YouTube sensations, I invite you to view the inspirational video below. It tells the story of AromaNet Café’s opening – with a little help from ACCION USA!
A Big Win for Microfinance Awareness
A briefing for New York City Council members marked a big win for AUSA on the microfinance awareness front. As you may know from my previous blog post, a lack of public awareness has hindered microlenders from growing to scale and fully reaching the small business community.
Over lunch, catered by AUSA client-owned business Kahlua’s Café, president and CEO Gina Harman presented a compelling case to our city’s key decision-makers:
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There are over 900,000 microbusinesses within New York city limits. ACCION USA has provided just over 11,000 loans in its 16 year history. We have a long way to grow.
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Despite this, AUSA loans have the potential to solve city problems ranging from unemployment (each AUSA loan provided helps create 1.7 jobs) to childhood obesity (loans made to street vegetable vendors help bring healthy foods to low-income neighborhoods!)
AUSA client Sandra Penaranda (right) stole the show at a recent City Council briefing. Her loan consultant, Ana Maria Ruiz, translated her compelling story.
While the facts are staggering, what really got the group’s attention was a testimonial given by two-time AUSA borrower Sandra Penaranda. She originally used a loan of a few thousand dollars to get both her credit history and record sales business started. Thanks to this support, her business has grown strong enough to earn a contract with the MTA—her new store opens up in the Jackson Heights-Roosevelt Ave. train stop next week.
The support of city lawmakers will be crucial in helping AUSA to reach as many metropolitan area entrepreneurs as possible. By providing capacity for grants and no- or low-cost capital to lenders, engaging in partnerships that increase microlenders’ visibility, and encouraging lending in risky markets via loan guarantee funds, the City can do its small businesses right.
That’s what AUSA petitioned for—if you run into your City Council member on the street, it wouldn’t hurt to do the same!
Empanadas, Quesitos, and Oh Yes, Women’s Economic Security in Miami
Luz Gomez of ACCION USA and Marcela Mezones, owner of “Sol del Cuzco.”
Colombian quesito pastries were served up by a former victim of wage theft who subsequently launched a cooperative with 3 other women that caters for non-profit organizations. These cool and inspiring examples of women overcoming obstacles to their economic stability set the tone at the launch of the “Portrait of Women’s Economic Security in Greater Miami”, a publication spearheaded by the Women’s Fund of Miami Dade. The publication sought to blend local data and the stories of how real women get by—particularly relevant in a state shaken by the recession and ground zero for the foreclosure crisis. If you can believe it, there was actually no study that looked at these issues specifically for Miami.
The whole point was to develop policy recommendations that focused around:
- Helping women build assets coupled with gaining solid financial skills
- Giving women the tools to fight for their rights,
- Training women to enter high growth industries and
- Investing in early childcare.
ACCION USA client, Marcela Mezones, owner of “Sol del Cuzco” restaurant spoke about her businesses’ impact on her life. She noted the intangibles of business ownership saying “if it wasn’t for this business, I’d still be making $7 an hour with no possibilities of getting ahead”. But it’s not all rosy, Marcela also noted how tough the downturn has hit her new business with a serious decrease in sales since the beginning of the year. Hopefully some of this stimulus money down the pike will support microenterprise organizations in this rough year so that we can in turn support awesome women like these.
Why Microfinance Isn’t on the Tip of Everyone’s Tongue (But Should Be)
For me, heading home for the holidays (most recently Passover/Easter) always means running into old friends. I’ve grown used to the small talk, but the “What do you do for a living?” question still makes me wince. Working in U.S. microfinance, an industry that is still relatively under the radar, makes it hard to give a straightforward answer.
Microfinance has been proven to help small business owners increase family incomes, revitalize communities, and create sustainable businesses (see AUSA’s Microtest study for the most recent data)—essential factors in helping our nation through the current financial crisis. Why, then, isn’t microfinance on the tip of everyone’s tongue?
1. Microlenders are the new kids on the block. Other small business and development strategies have been around longer than microfinance, which came to the U.S. in the early 1990’s. The SBA, on the other hand, got its start in 1953—four solid decades before the first U.S. microloan was made.
2. We lack capital too! A big-budget ad campaign could quickly earn AUSA recognition. However, dollars are scarce and must be focused on supporting lending activities. We’re forced to do the best with the limited resources we have – which have so far allowed us to reach less than 1 percent of microentrepreneurs nationwide.
3. We’re overshadowed by our international counterpart. U.S. microfinance grew from the success of the strategy abroad, and has since remained in its shadows. It’s no wonder that the average neighborhood small business owner isn’t knocking down microlenders’ doors when they are best known as “lenders to the poor,” providing loans as little as $50 to rural entrepreneurs in developing countries. (Fact: AUSA microloans average over $6,000 and are provided to business owners from a variety of economic backgrounds!)
Microfinance is based on a trickle-up effect—by supporting Main Street businesses, our economy as a whole benefits. The concept works with awareness too—if people start the microfinance conversation in their community, eventually city, state, and local governments will get word. And then, perhaps my third cousin’s ex-wife will finally understand what I do for a living.