Microfinance, But Only For Some?
I felt inspired yesterday by reading a blog about university students trying to make microfinance accessible to refugees in their community. Professor Jude Fernando’s microfinance students are applying principles learned in the classroom to serve the need that is being expressed in their community. As Professor Fernando said in the article
Worcester is a microcosm of the world, We don’t have to fly 1,000 miles away looking for the Third World. There is one right across the street.
Refugees like Oulimate have proven to be successful small business owners in the United States
I nodded as I thought, yes, indeed. Microfinance is a great tool for displaced refugees trying to build a new life in the United States. In fact it is said that the majority of microentrepreneurs in the U.S. are first and second generation immigrants.
You can imagine that a refugee from Burma, who doesn’t speak English, will find most success creating and selling their native handicrafts, since it’s unlikely that big-box employers like Walmart would hire them. As I read Priyanka Dayal’s article, I was mentally praising the students at Clark University for the important cause they are supporting.
Then I scrolled down to read my favorite part of web based journalism, the comments—here, both encouraging and discouraging. Some disagreed entirely with the work of the professor and his students at Clark, arguing that refugees are undeserving of microcredit because there are other “local” business owners who ought to be first in line. Or the comment that basically refugees don’t know the rules here, so they should be able to play the game, so to speak.
Indeed there are barriers to entry in the United States that are much greater than in developing countries, that why most microfinance institution offer financial education and technical assistance resources to assist entrepreneurs in meeting these requirements. It’s in our interest to see that micro entrepreneurs formalize there businesses and learn the rules. And most importantly we believe that all individuals no matter their country of origin, or road to entreprenuership are equally deserving of credit– capital that is needed to support a healthy family and a healthy community.
Read the excellent article written by Priyanka Dayal, and chime into the comments. I’ll add this one…
But far be it for me to point out the obvious. Okay fine… I will! It is integration of all aspects of our society that creates prosperity. Giving refugees a pragmatic tool like microcredit to empower their success, is a success that we all share. After all there are many who consider microcredit a human right.
Microfinance Week in Review: Week Ending February 5, 2010
Some of the week’s news in the microfinance, green business initiatives and the small business sector:
- Micro-loans helping businesses- CBS News
- How to bridge the funding gap for clean energy- Science Business Blog
- Microfinance is a solid investment in economic growth- Boston Globe
- Obama plan would expand some small-business loans- Washington Post
For Small Businesses, Green is the New Black
Green – it’s the new black. But hopefully, it’s more than a fad, or a marketing gimmick – but a real strategy to build our economy and secure our future. At ACCION USA, we spent the better half of 2009 focused on green and how “greening” can help grow small business. Our objective is simple: to provide business owners practical means to improve their profits, their community and their planet.
But how can “greening” grow small business, you ask? Incorporating eco-friendly products and energy-saving measures will be easier than ever! Going green impacts the bottom line and helps small businesses to:
- Access new, green-conscious consumers
- Reduce business energy, water and waste costs
- Participate in the growing green economy
- Hire for green jobs
- Leverage to tax credits and rebate programs
On the 40th anniversary of Earth Day this April, ACCION USA will launch a green loan program, so stay tuned for a sneak preview in upcoming weeks.
Jennifer Spaziano, vice president of business development at ACCION USA, ioins Main Street Microfinance as a regular blog contributor, covering green business issues and ACCION USA’s launch into green lending. Stay tuned for news and progress on our green lending initiative!
Tags: business, energy efficiency, green
Is ACCION USA More Than a Microlender?
For Margarita Amador, ACCIÓN USA served as more than just a lender; “ACCIÓN USA has helped me tremendously because I received a lot of advice not only on how to continue with my business, but on how to improve and manage my personal credit.”
Knowledge is power. What a simple but empowering phrase. It resonates with me on so many levels: as a recent college graduate, as a woman, and as a voter. So, when the latest FDIC white paper, Financial Education and the Future, outlined the startling state of financial education in the United States, it prompted me to consider ACCION USA’s role as not only a microlender but also as an educator.
The FDIC paper reported that an estimated 10-20 million individuals are unbanked – that is, they have no relationship with a bank. Moreover, this trend appears most acutely among new immigrants and members of minority communities. A staggering 35% of our county’s Latino population is unbanked, due equally in part to cultural differences, language barriers, and institutional distrust. This unbanked trend continues to lead these individuals to expensive alternative banking sources, such as predatory payday lenders.
Some advocate regulating these alternative sources, but rate caps only go so far. And more importantly, they don’t directly target the financial illiteracy that frequently lies at the root of this problem.
ACCION USA targets this root. We’re in the asset-building business, and education is an asset that adds value for generations to come. Our interactive workshops show individuals that saving is important – if only $5 a month. Our personalized technical assistance explains why good credit is crucial in this country, and why debt must be managed and not ignored. Our one-to-one business counseling demonstrates that planning and cash flow and recordkeeping are essential for business survival.
For some, these things might be common sense. But consider the perspective of a recent immigrant or of someone whose parents immediately cashed each paycheck just to put dinner on the table. Just as your home environment will influence your knowledge of sports, music, or any other activity, it can also predict your future money management skills and those of your children and of your children’s children.
Instead of allowing financial illiteracy to perpetuate, ACCION USA takes the initiative to educate and instill in individuals the education and tools they need to succeed in this country.
And by doing so, we’re seeing every day that knowledge really is power.