Academics and Poverty?
The word Microfinance comes out of my mouth sounding academic sometimes. I throw it in discussions with “social justice, fair trade, and gender equality.” How can a topic so academic-sounding be put into everyday practice?
I have struggled for a while with that question and at times left it on the back burner, and then come back to it at a later date. Poverty is a fact of the world as we know it and exists because of institutions we have put into place, ironically. Dr. Muhammad Yunus, Founder of the Grameen Bank and Nobel Peace Prize winner, has devoted his life to poverty-alleviation for more than four decades. Recently, I had a chance to hear Dr. Yunus speak to a crowded sanctuary at Emory’s campus in Atlanta, GA. Filled with brilliant practicality, he spoke of initiatives undertaken by his Grameen Bank to counter the affects of poverty in Bangladesh and the world.
From global collaborations with Dannon Yogurt to make a nutrient-packed meal for malnourished children, to the drawing board of Adidas to create a shoe that could be sold for less than $1, Dr. Yunus described Grameen’s efforts to engage powerful companies in what he called “Social business.” Social business initiatives are run for the purpose of eliminating a social need. Malnutrition and the need for shoes can be addressed by social businesses due to the selfless nature of the initiatives. Earning a profit is not in the agenda, rather solving a social problem.
In the United States, Grameen Bank of America has a branch in Queens, NY as well as Omaha, NE and plans are revolving around a possible San Francisco location. “The need is everywhere,” exclaimed Dr. Yunus, referencing the need for accessible capital and resources in so many places around the world where bigger banks are not able to meet the needs of “credit unworthy” clients. ACCION USA stands in that gap between entrepreneurs and big banks to offer Start-Up and existing business loans, as well as credit-building resources and tools to empower business men and women to achieve their dreams.
You can debate the academic side of microfinance all you’d like, but just be sure to allow microfinance to affect you practically today.
–Andy Golden
Microfinance Week in Review: Week Ending January 22, 2010
Some of the week’s news in the microfinance, green business initiatives and small business sectors:
- Lending small biz a big hand: Microlender Accion USA fills void with local entrepreneurs- New York Daily News
- Microlenders Making a Big Difference- The San Diego Union Tribune
- The first small business loan of the year goes to …. - CNN
- Green Banks Offer Mega-Bank Alternative- Sustainable Business.com
Profitability Not the Only Indicator of US Microfinance Success
The year’s first high-profile news piece on U.S. microfinance hit Time magazine readers over the weekend (Barbara Kiviat’s “Can Microfinance Make It in America?”). For an industry that once struggled to catch the ear of the general public, major media coverage is a great way to kick off the New Year. However, as some of the oldest U.S. microlenders—like ACCION USA—enter their third decade, my one hope is that journalists can stop asking whether they can have a lasting impact and start focusing on the fact that they already have.
In gauging whether U.S. microfinance organizations have staying power, it’s critical to include more than just one measure: profitability.
In gauging whether U.S. microfinance organizations have staying power, it’s critical to include more than just one measure: profitability. Finding a model that is self-sustaining happens through understanding the marketplace, hard work, innovation and a commitment to continuous improvement.
Ms. Kiviat failed to explore what makes all that effort worthwhile— statistics indicate that microfinance IS successful as a way to keep people in the United States out of poverty. Our most recent impact study indicates that each loan ACCION USA provides contributes to the creation or retention of 2.4 jobs. At an average loan size of $8,000, that makes microfinance among the most efficient source of jobs in the nation. Moreover, those jobs pay an average of 24 percent above the national minimum wage and allow business owners to increase household income by 6 percent. Building personal assets is a key to getting and staying out of poverty.
With over 10 million microbusiness owners in the United States lacking access to affordable loans, there is vast unmet need. We are dedicated to finding effective ways to reach those in need, to scale our work and to do so in ways that generate enough income to sustain ourselves. One might argue that’s a pretty damn good reason for microfinance organizations to stick around.
Today, we all raise money through contributions large and small, from individuals, corporations and foundations. Each understands that interest rates are set not simply to abide by the laws of the land, but to allow the mircroentrepreneurs to accumulate assets, not be drained of them. While our rates don’t compare to those charged in other markets, repayment of the loan with interest is the obligation of every borrower. Ask anyone who has sacrificed and worked hard to repay her loan if what she received from ACCION USA was a hand out and I bet what you will hear is it was a hand up.
Profitability is something that microfinance organizations strive for, but shouldn’t solely define success. Nonprofits can have strong, lasting business models, too.
Microfinance at Work in Boston: Video Success Story Series
Meet Adam Lantheaume, owner and founder of The Boston Shaker Inc., in the second post of our video borrower success story series, brought to you as part of our “Microfinance: It’s Not Charity, It’s a Chance” holiday awareness campaign and fund drive.
Adam is sprucing up the “specialty cocktail” industry by selling imported garnishes, hard to find cocktail bitters, staple barware and cocktail books. The Boston Shaker provides the ingredients and classes to build the ‘know how’ for hosting a cocktail party, or enjoying cocktails from the comfort of home.
How is Adam’s business making a difference?
The Boston Shaker Inc. is working to be ‘economy friendly’. “My business is helping people who, in this soft economy, are starting to do more things themselves at home rather than spending money going out.” Customers of The Boston Shaker are hailing from all over and latching to this idea! “That enthusiasm and the excitement I get from my customers is what keeps me going”, says Adam.
Adam is working hard to start small and expand his business, and opportunities for future employment. Adam recently moved into his own storefront space, after finding an innovative way to share rental space with a local retail store. “It was a really positive experience for both parties. [After sharing space], I better understand my future business goals and now, with my own four walls, I can do a lot more for the community that I’ve been trying to help.”
Encounter with ACCION USA
Adam learned about ACCION USA’s business loans by attending one of our free financial education seminars, The Fundamentals of Running a Successful Small Business. When he was ready, he applied for a small business loan to purchase materials for his classes and attend an annual gathering of the top individuals in his industry. As a recipient of the Samuel Adams Brewing the American Dream Loan Fund at ACCION USA, Adam has taken advantage of the program’s speed coaching events, meeting one on one with experts to gain valuable advice.
Cheers to that!
Check out The Boston Shaker for your holiday shopping needs.
Microfinance Week in Review: Week Ending December 4, 2009
Some of the week’s news in the microfinance and small business sectors:
- Buddy Can You Spare a Startup Dime? – www.msn.com
- Loans to Small Business Are Key to Economy- Wall Street Journal
- Changing Lives with Spare Change: My Two Cents on Microfinance- Huffington Post
- How to Secure a Microloan- www.inc.com
- For Small Business the Jobs Forum Is All About Credit- New York Times
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.
U.S. Microfinance Goes Green
On October 15, Blog Action Day, 13,254 bloggers in 156 countries joined keyboard forces to write about climate change. 18,080,637 people read these posts. Governments in the United States, United Kingdom and Spain wrote official posts on their blogs. What is moving so many people to action? Scientists have determined that 350 pp, (parts per million) of carbon dioxide in the atmosphere is the safe limit for humans. Currently, there are an average of 387 ppm (parts per million) of carbon dioxide in the air. This is scary.
(Image from Target300.org)
ACCION USA is committed to the greening of American businesses.
Through creative partnerships we’re giving access to more people to change their business to make the world a place where we can all breathe better. Interested in partnering? Get in touch, we’d love to discuss!
We have a special project team developing a green loan product. We have researched Energy Star requirements. We have looked into LEED certification. And we need to hear from you: What is your business doing to become more energy efficient? Do you know a business that brings green products and services to their customers? How can we at ACCION USA use our services to be the change we want to see in the world?
Do you have a green business? Have you made changes in the way you do business to save energy? Tell us about it. If you’d be interested in a green loan product, leave a comment and we’ll be in touch with you!
Let’s show the world that microfinance and US small business is united to fight climate change. We know that from micro-actions we can make macro-change.
Providence Businesses: Full Speed Ahead
Deirdre Andiorio, a sales manager at Samuel Adams, provides practical marketing advice to Providence entrepreneurs.
Nearly 150 of Boston’s food, beverage and hospitality entrepreneurs have tasted Brewing the American Dream’s speed coaching, soaking up valuable advice from marketing, finance and business development experts over the course of several events. On September 16, The Boston Beer Company and ACCION USA decided to get their feet wet in Providence, RI, offering the first ever speed coaching venue to entrepreneurs in another New England city.
Twenty eight entrepreneurs and several professionals within the small business community made their way to the Providence Biltmore hotel. Representatives of the Rhode Island SBDC, RIEDC, as well as accountants, Nixon & Peabody LLP lawyers, and professionals from Samuel Adams and ACCION USA offered their expertise to provide customized advice to a host of entrepreneurs that ranged from restaurant owners to managers of cafes to hosts of food radio talk shows.
A notable aspect of the evening was the lively networking taking place between business owners and professionals. Of course the food and beverages provided only served to enhance this vibrant exchange of ideas. Participants expressed appreciation for this opportunity to get advice to move forward with starting or expanding their businesses. Samuel Adams Brewing the American Dream hopes to continue extending this unique opportunity to entrepreneurs throughout New England – Full Speed Ahead.
Microfinance Week in Review, Week Ending September 25, 2009
What went on in microfinance and microenterprise development, week ending September 25, 2009
- SBA Lending on the Upswing (HispanicBusiness.com)
- Small Change: Billions of dollars and a Nobel Prize later, it looks like ‘microlending’ doesn’t actually do much to fight poverty (Boston Globe)
- Not poor enough (Opportunity Fund Blog)