Putting Financial Skills into Action: New FIELD Whitepaper
There’s a renewed awareness today that it’s not enough to simply be knowledgeable about financial concepts–it’s about applying that knowledge–even in simple ways. We all know that eating vegetables are good for us yet, more often than not we reach for the french fries instead. This simple scenario also holds true in the realm of financial skills. Many of us know that we need to save, budget and work on our credit score but all too often we give in to impulses and put things off until tomorrow.
This move from gains in financial knowledge toward putting these skills into practice has been termed ‘financial capability’. A commitment to building financial capability is growing amongst microenterprise organizations, as discussed by the Aspen Institute’s FIELD program’s new white paper on the topic. Microenterprise organizations like ACCION USA use financial products coupled with financial education, allowing microentrepreneurs to not just learn about managing finances, but to effectively put that knowledge into practice with a financial product.
How is ACCION USA building financial capability? ACCION USA’s small business loans, secured loans (guaranteed with the money of the applicant) and small dollar credit builder loans (for individuals with no credit history) allow microentrepreneurs to build a strong installment credit history through on-time payments over an extended period of time. Financial education on credit and other small business fundamentals is provided by AUSA staff throughout the application process and the life of a small business loan, building skills around credit management that lead to long-term financial success.
Keep your eyes peeled for new tools that are emerging to support work around financial education for microentrepreneurs, like ACCION USA’s e-learning course on credit, or other web-based training sites like assetplatform.org.
Microfinance Week in Review: Week Ending August 27th
Some of the week’s news in the microfinance, green business initiatives and the small business sector:
- Quest for the Perfect Credit Score- CNN
- No Down Side for Pittsburgh Businesses as Students Arrive- Pittsburgh Review
- Small Businesses are Official’s Business- The San Diego Union Tribune
- Five Things Small Businesses Want From Washington- NACS Online
- Small Businesses Loan Programs Need Cash ASAP- CNN
Tags: credit, credit cards, loan, microcredit, microfinance, pittsburgh, small business, Washington D.C.
How Today’s 20-somethings Will Revolutionize Microfinance
I’m a 20-something and to put it frankly, I am incredibly proud to be one. However, if you had the opportunity to read the recent New York Times article on 20-somethings, you would think that I am of the flaky, meandering, and average variety. I’m currently working at a unpaid internship (at ACCION USA), getting my masters degree, working a side job, and still getting help from my parents on a few (VERY few) of my bills.
So why am I so proud to be a 20-something? Because I am from a generation that has a voice. We are socially active, we care, and we want change. Think I’m wrong? If the most recent presidential elections showed one thing, it was that when 20-somethings want change, we speak LOUDLY and the world takes notice.
So what do 20-somethings have to do with microfinance? I’ll say it again: 20-somethings care. While the author from the Times argues that unpaid internships, the Peace Corps and Teach for America are ways 20-somethings are avoiding adulthood what they ignore is young people fighting to improve their communities, fighting to give every person in the world an equal chance to succeed, fighting for a cause. I’m not putting myself in debt up to my eyeballs and working jobs where I don’t get paid for nothing. I want to make a change.
I support, promote and—dare I say it—love microfinance for the opportunities it provides those who are unable to access loans through the commercial banks. We can argue about my choice of career path (my family worries I’ll end up working for free forever), about the need for microfinance in the United States (how many struggling small businesses do you know?) but you will lose any argument that says that microfinance does not work and that 20-somethings don’t care about it.
ACCION USA Microfinance Council -group of 20-something professionals advocating for domestic microfinance and the growth economic opportunity in their community-is a perfect example. The microfinance revolution will be continued by groups like the Microfinance Council and other like minded 20-somethings and I argue it will become one of our great triumphs under the banner of economic equality. Why? Because we understand what it means to lack financial opportunity and to have potential but have a whole society daring us to fail. We share the struggles of microfinance clients and that reason fuels passion for the cause. And right now we are the ones in the field breaking down economic barriers …. one unpaid internship at a time.
CDFI Awards $750,000 to ACCION USA
This morning ACCION USA received a $750,00 grant, the largest given to the New York City office. This grant is part of $104.9 million in awards for 180 local financial institutions serving 44states and the District of Columbia from CDFI, the Community Development Financial Institutions Fund from the U.S. Treasury Department. (Read the full press release.)
This grant will allow ACCION USA to lend more and continue improving small businesses everywhere.
ACCION USA's Grant by CDFI
The Toxic Monster on Main Street: Dry Cleaning
For many consumers and small business owners, green is an aspiration – a way of life. We rarely find ourselves swimming in the scientific details. So today, here’s a close look at dry cleaning, the toxic “Monster on Main Street” that feeds on the uninformed consumer and business owner alike!
According to the U.S. EPA, almost 40 percent of dry cleaners don’t have the resources needed to comply with regulations. With some green upgrades carrying heavy price tags for small businesses, many small dry cleaners choose to forego going green altogether or opt for “natural” options that are not so “green” in reality.
The result has been a number of storefronts making the “green” dry cleaning claim without the security you would like. Consumer uncertainty, fear and product confusion keep small businesses providing the high-toxic options.
The Federal government has caught onto the issue, and by 2020 all “co-inhabiting” dry cleaners (those located in apartment buildings, schools, etc) will need to transition from using perchloroethylene (perc for short). http://www.epa.gov/region2/capp/dryclean.htm Some states (i.e. CA, NJ & MA) are already providing incentives for dry cleaners to go “green”. What’s so bad about perc? The US Environmental Protection Agency (EPA) has found that clothes dry cleaned with perc can elevate levels of the toxin throughout a home and especially in the room where the garments are stored. Nursing mothers exposed to perc may excrete it in their milk, placing their infants at risk.
If governments, both local and national, are legislating around and promoting greener professional cleaning and if consumers are demanding real green options – why are 85% of dry cleaners still using perc? http://departments.oxy.edu/uepi/ppc/index.htm Could it be that many of the dry cleaners are mom and pop companies just trying to weather the recession?
ACCION USA, through it’s Green Loan Program www.accionusa.org/green has started speaking with industry leaders such as Peter Sinsheimer, director of the Pollution Prevention Center at Occidental College and Joy Onasch at the Toxic Use Reduction Institute at the University of Massachusetts to see how microlending can play a role – financing the gap between government incentives and a business owner’s pocket.
Is your dry cleaner really green? Do you have dry cleaners claiming to be “green” on your block? Do your part – get informed and fight the toxic monster on main street one piece of clothing at a time.
Microfinance: What’s In It for Today’s Teens?
This post is presented as part of our Youth Microfinance blog series. By nurturing student thought leadership, ACCION USA is helping to build future leadership for the microfinance industry as a whole. We hope that you’ll enjoy the ideas and perspectives of ACCION USA’s youth leaders as well as Main Street Microfinance’s regular posts from industry professionals.
By: Percy Allison
What attracts a high school senior to microfinance?
It may be hard to draw the comparison between a stu![soccer2.jpg_0[1]](http://www.accionusa.org/blog/wp-content/uploads/2010/08/soccer2.jpg_01.jpg)
dent’s soccer struggle and the effort of the entrepreneur, but I would argue that the raw similarities are surprisingly real.
During four years of struggling to become the varsity starting goalie I learned about risk, drive, persistence and perseverance.
Every entrepreneur is taking a risk. They are starting their own business. They are taking a chance to succeed. Every young person takes risks. Every young person needs someone to give them a chance to prove to the world that they too can do it. Whether it is the teacher staying after class and giving an inspirational pep talk or the football coach giving the quarterback another chance after he threw the game-losing interception – every young person needs someone to believe in them – and so does the entrepreneur.
This is why so many young people are fired up by microfinance. It is other people being creative and finding their own way. So are we. It is other people putting their heart out for something. So are we. It is other people being courageous, intelligent and believing in themselves and more importantly believing in the world to support them. I guess that is the big thing. They believe. As young people, that is the most important thing. We believe. We are new to life and we believe in it. We want to find our way. These entrepreneurs share that same contagious passion. How could we not be inspired? How could we not see ourselves in the ACCION USA client?
There are a ton of organizations and a variety of ways to help alleviate poverty and do good. But among all of those, microfinance finds a special place in the heart of teens. In this way, helping the entrepreneur is like helping ourselves — seeing them achieve is seeing ourselves achieve. And it all is confirming our belief that in the end, success is believing in yourself.
Destination: Karl’s Sausage
ACCION USA client Karl’s Sausage Kitchen & European Market is a destination for meat lovers throughout New England and beyond. On Tuesday night, it was a destination for ACCION USA staff, as some of us drove to Saugus, MA to participate in a ceremony celebrating the installation of their new business sign.
It was for the design and installation of this sign that Karl’s applied and was approved for an $18,000 loan from ACCION USA’s Samuel Adams Brewing the American Dream Fund, a partnership between ACCION USA and Samuel Adams designed to provide access to capital and mentorship for small business owners in the food, beverage and hospitality sectors. “The credit crunch and recession have really made it difficult for businesses of our type to secure a loan. We were lucky to hear about the program,” said Anita, one of the owners of Karl’s.
As we stood outside for the lighting of the new sign, a fresh and catchy look that fully maintains the Karl’s tradition, I glanced around me at the family, friends, distributors, and loyal customers that had gathered for an evening of German Sausages and celebration with the owners of Karl’s. I thought about how much the business is impacting the community, not just in the lives of their 6 employees (soon to be 7), but their neighbors, long-time customers and especially Doris, the first employee of Karl’s who has worked there since 1958. ‘It’s been my life’, said Doris when selling items at the cash register. I was tremendously proud that ACCION USA was a part of this celebration, and could be a partner in the new life and energy that Anita and her husband Bob are pouring into this landmark business.
Check out write-ups in boston.com’s business updates and the Lynn Daily. Congratulations Anita and Bob! ACCION USA is thrilled to be a part of your business journey.
Karl’s Sausage Kitchen, located at 142 Broadway (Route 1 North), is open Tuesday-Thursday from 9 a.m. to 6 p.m., Friday from 9 a.m. to 7 p.m. and Saturday from 9a.m. to 6p.m. Reach the business by phone at (781) 233-3099 or online at www.karlssausage.com.
ACCION USA Green Business Client Featured in “Entrepreneurship Interviews”
By Cailey Ryckman
Entrepreneurship Interviews, a popular blog that features interviews with real life entrepreneurs and their businesses, recently highlighted one of ACCION USA’s green loan recipients, Cheney Brand. Cheney owns the solar energy design and installment company SunBug Solar. Read more about Cheney and how he put his ACCION USA loan towards green business success.
ACCION USA Featured in a New Publication on Scale
After 3 years of exchange with our peers in the pursuit of scaling our lending, a new publication was just released by the Aspen Institute’s FIELD program. The last few years were daunting to say the least, but our periodic meetings and often heated (well, heated in a good way) discussions really allowed us to learn and encourage each other along the way (full disclosure: I co-authored the publication too).
The publication, Dollars for Dreams: Scaling Microlending in the U.S., is the culmination of all these conversations—we hope it helps other organizations in some way as they seek to grow their lending programs. Check it out!
Tags: microfinance, microlending, scale
Billionaires Pledge to Give Away Half of Their Fortunes
Everybody in the non-profit sector should make sure to read the New York Times article “Pledge to Give Away Half Gains Billionaire Adherents” published yesterday.
According to Stephanie Strom close to 40 American billionaires including NYC’ Mayor Bloomberg, David Rockefeller, Bill and Melinda Gates, and Warren Buffett made the promise to donate at least half of their fortune to philanthropy.
The combined total of the donations will be close to $600 billion !
What do you think this means for microfinance and the non-profit sector?
Tags: LinkedIn