Reverse Remittances and U.S. Microfinance
When I interview ACCION USA clients to gather information for their Kiva profiles, they nearly always mention having a family member in another country relying on them to send small portions of their income, or “remittances,” back home. That’s why this week’s New York Times article on “reverse remittances” struck a chord with me. The article explains how families abroad are now having to send monetary support to their family members in the U.S. While immigrants originally came here to search for better economic opportunities, nowadays they are finding the opposite.
Is returning to their home countries an option? For some, it is – but it’s not that easy. It may take immense effort and sacrifice to scrape together the thousands of dollars needed to move to a new country. Many immigrants who come to the U.S. give up their homes and possessions in their native country and trade them in for an entirely new life. They may have married and had children who would be disrupted by a move to another country they barely know.
Immigrants are a vital part of our economy – in New York, for example, over the last decade, immigrant-dominated neighborhoods such as Washington Heights and Sunset Park have seen increases in new firms at rates close to 50%, and job growth of 30% (compared to overall city job growth of 7%).1 Entrepreneurship is an engine of employment, as small businesses provide self-employment for the business owner and are responsible for 75% of net new job creation in the U.S.2
Now, more than ever, small business ownership is a way for immigrants to take control of their economic future and take the initiative to provide employment opportunities for themselves and others in their communities. As unemployment grows in the U.S., ACCION USA’s mission to support these entrepreneurs and, by extension, the economic development of their communities, gains more urgency.
1A World of Opportunity, Center for an Urban Future. February 2007.
2MicroTest Outcomes 2008. The Aspen Institute – FIELD Program
Microfinance Week in Review: Week Ending November 27, 2009
Some of the week’s news in the microfinance, small business and communtiy development sectors:
- Tis the Season to Remember How to Celebrate- Social Earth
- CGAP Ponders Future of Branchless Banking in Microfinance- Microfinance Focus
- Why are Some Cities More Entrepreneurial than Others?- New York Times Blog
- For SBA Loans, Stimulus Well Runs Dry- Wall Street Journal
- Brazil Okays ACCION’s Microfinance Plans in Amazon- Microfinance Focus
Happy Thanksgiving from your friends at ACCION USA
Microfinance Week in Review: Week Ending November 20, 2009
Highlights this week in microfinance, small business, and community development:
- Microlending, from Bangladesh to the Boroughs- The New York Times
- World Vision Launches Kiva-like Microfinance Platform- Social Earth
- ACCION International invests $500,000 for 49.5% Equity Stake in Indian Microfinance Institution Saija Finance Pvt Ltd- MicroCapital
- $500 Million and Apology From Goldman- New York Times
- Geithner Says Banks Have ‘Obligation’ to Lend More- Bloomberg.com
- 3 Small Business Lenders May Join Forces (ACCION Texas)- San Antonio Express
Global Entrepreneurship Week: Linking Ideas with Young, Enterprising Minds
November 16-22, 2009, Global Entrepreneurship Week 2009, will introduce millions of young people in more than 75 countries around the world to entrepreneurship. More than 3 million participants in panels, forums and innovation tournaments will be encouraged to explore innovative thinking, linking ideas with enterprising minds!
The timing for the second Global Entrepreneurship Week, founded last year by the Ewing Marion Kauffman Foundation and Make Your Mark, couldn’t be better.
Underlying this week is what the Kauffman Foundation has termed a ‘coming entrepreneurship boom’. An upbeat generation of young entrepreneurs ages 20-34 is taking a lead in small business innovation and development. With an overall more positive outlook on the economy (see Crain’s New York Business.com Article), young entrepreneurs are leading the way with innovative business ideas and strong plans for execution.
Perhaps it’s that young people see entrepreneurship as a viable and exciting alternative to today’s slow job market. Perhaps the success of young companies like Google and Facebook is alluring. Perhaps the reasons for this ‘coming entrepreneurship boom’ are many! ACCION USA has certainly seen a surge in young entrepreneurship. Check out Joshua’s story. Joshua, an ACCION USA client on Kiva runs a web-based used/new clothing company in Michigan and received a $1000 loan from ACCION USA to purchase inventory.
This year’s Global Entrepreneurship Week 2009 involved participants from all walks of life. You too can get involved today to wrap up Global Entrepreneurship Week by visiting www.unleashingideas.org. Don’t just watch this innovative economy unfold – jump right in!
The Kiva Transparency Debate: Here’s What’s Crystal Clear
In the microfinance world there has been a lot of discussion about Kiva in the past month. Much of the talk has centered on Kiva’s description of the way that its users’ dollars are channeled to microentrepreneurs. Clearly there is room for debate over how to best structure (and then explain) what is admittedly a complex system.
Lost in the debate was Kiva’s announcement last week that it had topped $100 million raised, just four years after the organization’s founding. With a stunning number like this, it seems safe to say that no other microfinance organization has so effectively mobilized large amounts of capital in very small increments.
ACCION USA witnessed the “Kiva effect” firsthand, shortly after posting our first clients to Kiva.org this summer. Before long, Good Morning America, CNN, and NPR were all running stories about microfinance in the United States. We were flooded not just by calls from entrepreneurs seeking a loan, but also overwhelmed by the support of individuals who wanted to help.
Kiva’s work worldwide makes two facts crystal clear: the Internet offers tremendous potential to connect individuals to the transformative power of microfinance and that Kiva lenders have an unwavering commitment to helping others succeed. This is true whether they are supporting an entrepreneur a world away or one right in their backyard. As an organization working to deliver capital to those who desperately need it, we at ACCION USA are thrilled to welcome to our organization these new stakeholders (some of whose stake is just $25). We are so glad they joined us, and hope that they will continue to learn about our work and the clients we exist to serve.
A Friendly ACCIONista, Coming to a Town Near You
With an online small business loan application and direct lending offices in Boston, Atlanta, New York and Miami, ACCION USA makes microloans available nationwide. However, unless you live near one of these four metro areas, you can’t just drive down the street to visit your friendly neighborhood ACCIONista.
However, ACCION USA loan consultant Rachel Hynes will soon be on the road in Philadelphia and Washington, DC—two markets that we have set in our sights to grow our presence and serve more microentrepreneurs— meeting and greeting clients, potential borrowers, and community partners.
As a member of ACCION USA’s internet lending team, Rachel specializes in working with clients and partners nationwide to bring microloan services to small business owners who need them. Usually this means working with people over the phone, but for three weeks Rachel will be on the road to meet with YOU in person. She loves shaking the hand of the entrepreneurs she helps, and meeting in person with community referral partners.
Make Rachel’s Day
We know that bankers want to help their clients, but it’s not always possible to offer every entrepreneur a small business loan. You can talk with Rachel about how we can build a referral relationship with your bank to mutually benefit our companies and our clients. And we don’t only partner with banks. If you are part of an organization with a mission to help small business owners thrive then Rachel wants to meet you, too! She will speak with you about your organization’s work and how ACCION USA can offer important value add-ins for your clients. Find out why companies from Bank of America to the Small Business Administration to the Hispanic Business Exchange work with us, and why you should as well.
Rachel’s schedule is the following:
November 23-25: Washington, DC
November 30-December 4: Philadelphia
December 7-8: TBA (Philadelphia or Washington, DC)
December 9-10: Washington, DC
Leave a comment or email rhynes@accionusa.org to schedule a meeting with Rachel, and help increase microloan services in your community!
Microfinance Week in Review: Week Ending November 13, 2009
Some of the week’s news in the microfinance and small business sectors:
- Craig Newmark’s gift to boost microfinance, ACCION USA’s Kiva lending- Microfinance Focus
- Banks leery of Treasury’s small business lending plan- CNN Money.com
- Small-business optimism rises, but job machine ’still in reverse’- Los Angeles Times
- ADB report favours strengthening legal framework for microfinance- Microfinance Focus
- ACCION Takes Equity Stake in Saija Finance, a Microfinance Institution Serving India’s Poorest – CSRWire
The Microfinance Council Did it Again!
The Microfinance Council of ACCION USA did it again!. With commitment and enthusiasm over 60 supporters of gathered at the Axelle Art gallery in New York City on Wednesday night to support out work. ACCION USA is incredibly lucky to receive support from the hearts and minds of the members of the Microfinance Council—they are truly some of our strongest supporters. Over 200 volunteer members strong, they organize events and fundraisers, conduct consulting projects, and raise general awareness about our products and services.
Last nights event for ACCION USA was a ton of fun and was truly heart warming. Want to get involved? Consider supporting a local business by hosting an event for ACCION USA yourself. Get inspired to gather your friends and community members at an event to educate them about the cause of domestic microfinance. ACCION USA and microentrepreneurs need your support more than ever! Find information here to plan your event or contact our volunteer fund raising guru Jessica at jessica.royston@gmail.com.
Check out the video from the fundraiser last night. A special thanks to Live Footage for their spectacular musical performance, a combination of electric cello and drums and keyboard with an electronic Echoplex looping.
Tags: accion usa, events, fundraising, Microfinance Council
Microfinance Milestones in Miami
One of the great things about working at ACCION USA is the enthusiasm that each and every employee has for helping the small businesses that we serve—and the camaraderie that stems from that.
On Friday, staff from coast-to-coast got some great news from our Miami office—read below to learn how multiple staff came together to make one historical microloan!
From: Christina Lopez
To: All Staff
Subject: New Record in Miami
We just reached a new milestone in the Miami office. Joann Milord has just disbursed the largest loan in the office’s history – $30,000! Joann worked tirelessly on this application (it consumed her for weeks) and, in the end, it completely paid off. This is an achievement in and of itself but to make it even better, the client is Haitian – a market that Joann has spent three years dedicated to. The client worked with SogeBank in Haiti (this name will sound familiar to some since this is the Haitian bank ACCION International partners with). She bought one of their divisions called Food Express which allows Haitian-Americans to send food to their family in Haiti. Please join me in congratulating Joann for her effort. Also, we would like to thank Rob Kostas who underwrote the loan and recommended the maximum $30,000 this start up business was eligible for.
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From: Paul Quintero
To: All Staff
Subject: New Record in Miami
Congratulations Joanne and Rob on a job well done!
From an organizational perspective, this one $30,000 loan is the equivalent of working to close 4.4 loans at our typical loan average of approximately $6,800, but with greater customer focus and a fantastic new referral opportunity for larger sized loans by relatively sophisticated and more formal entrepreneurs!
As an aside, this client also offers an interesting service—ie., they enable folks living in the US to have food delivered directly to relatives and friends in Haiti!
This is a great achievement and a wonderful way to end the week! Keep up the great work.
ACCION USA in Action: Meet Elizabeth, Financial Education Coordinator
This is the second in a series of posts that examine “a day in the life” of an ACCION USA employee from each department. In this post, we meet Elizabeth Garlow, a Financial Education Coordinator based in Boston, MA.
Elise Tosun: How did you find out about AUSA and when did you first get involved?
Elizabeth Garlow: I first learned about the field of microfinance in an international development class in college, and upon participating in a microfinance workshop, I heard about ACCION USA. Looking to get some hands-on experience in the field, I found out about an opportunity to work for ACCION USA in the area of financial education as an Americorps VISTA volunteer. Before I knew it, I was hopping on a plane to move from Detroit to Boston!
ET: What is a typical day like for you?
EG: One thing I love so much about my job is that there really is no typical day! My role involves actively engaging with current and potential clients, providing technical assistance and teaching online or community workshops on credit, money management and small business fundamentals. In one day, I may speak one-on-one with clients seeking advice on managing their credit or wanting to learn more about online marketing strategies for their businesses. As part of ACCION USA’s effort to constantly be responsive to the needs of entrepreneurs, I also work on new product development initiatives. This involves exploring potential partnership opportunities with student-run microfinance clubs, community organizations, and corporate partners, to name a few.
ET: What do you love most about working with AUSA?
EG: The entrepreneurs fascinate me, because they can find a way around any obstacle. I love interacting directly with entrepreneurs on a daily basis and being ‘in the field,’ witnessing first-hand their passion and creativity. ACCION USA has a partnership with The Boston Beer Company called Brewing the American Dream®, which focuses on providing access to capital, training and mentors to food, beverage and hospitality entrepreneurs. I’ve been organizing one-on-one coaching events for them, and it’s very rewarding to help them along the path to growing and strengthening their businesses and the communities around them. Cheers to that!
ET: Are there any challenges to your job?
EG: Microfinance is both an exciting and a challenging field to be a part of today. It’s challenging because our clients are constantly trying to stay afloat in today’s economy. It’s exciting because, while times are tough, there is a huge demand to find creative solutions to respond to today’s challenges. At ACCION USA, we’re working hard to be a leader in identifying those creative solutions.
ET: Any final words of wisdom?
EG: Shop locally this holiday season! We hear again and again how small businesses are the backbone of our economy; let’s make sure we’re doing our part to support them.