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

• A Plea for Direct Lending to Small Businesses- Wall Street Journal
• Hub looks for boost to business- The Boston Globe
• What States and Cities Are Doing to Help Small Businesses- New York Times
• Microfinance industry experts debate over Inflated Interest Rates- Microfinance Focus
• Olympics Create a Green Business Tipping Point in Canada- Triple Pundit

Micro-yoga is a 45 minute rejuvenating midday class full of stretching, deep breathing, and mind and body awareness techniques.

As a socially conscious nonprofit organization,  ACCION USA understands the value of healthy and happy staff. We had our first Micro-yoga class yesterday, and it was a delightful experience. We’re welcoming members of the public to the class—here are 5 great reasons to join us!

1. It’s low-cost! Your small donation for the class benefits ACCION USA
2. The serene 45 minute session gives you a major boost of energy and focus
3. It might be the only good reason you can find to step away from your desk
4. The inner peace you create during class cultivates good decision making
5. We’ll leave this fifth up to you to decide (feel free to comment)… Come and try is for yourself!

Check out www.accionusa.org/microyoga to learn more.

ACCION USA pioneered online microfinance lending in 2005 with the original launch of the OLA—it was a bright, shiny new piece of technology, and was instrumental in helping us increase microloan access in the U.S. (It even earned the Innovation in Technology Award from the Association for Enterprise Opportunity).  But five years is a lifetime on the Web, and today, the application is riddled with challenges that we’re hoping to work through in an up coming re-launch.

Website usability experts and the microfinance community in general might be interested in what we’re learning along the way:

• Simple design is good design. Our core concern was designing a tool that would effectively serve individuals with varying levels of Internet literacy. What we discovered was that users across the internet-knowledge spectrum all appreciate the same thing: good, intuitive design. Think Google, whose bare bones, yet eerily intuitive platforms are virtually universal.

• Keep it simple, stupid (KISS). We’re applying KISS, the age-old marketing adage, to every word we write.  The microfinance industry is so full of jargon that most practitioners no longer realize that phrases like “debt-to-income ratio” and “overextended credit” don’t mean much to typical borrowers (or maybe just this blogger). We’re being careful to use the words our borrowers use, making the application far less intimidating.

• Technology can be personal. Internet and remote lending is often criticized due to its lack of personal touch, a concept widely regarded as critical to maintaining high repayment rates. With that in mind, we’re making the online application process as personal as possible—my favorite new OLA feature is the financial education “prescription” that will be generated for each new loan applicant whether they are approved or denied.

We’re due to re-launch this summer so stay tuned!

P.S.… Our amazing consultants on the OLA relaunch project, the team at Addventures, taught us everything we know.

• How has Microfinance Changed Since 2005? – Triple Pundit
• Selling the Business with Social Mission Attached- BusinessWeek
• Regulators ease up on small business loans- CNN
• The End of the Big Idea for the Jobs Bill?- NewsWeek
• Lending Falls at Epic Pace- Wall Street Journal

But what happens when government money is injected into a system that doesn’t exist? Community, government, and for-profit groups scramble to create the infrastructure. After much “building”, what has been made clear is that “there are currently not enough skilled workers and green entrepreneurs to expand weatherization and efficiency retrofit programs on a national scale,” as Vice President Biden concluded in a recent task force report on the subject.

Contractors need loans for items like blower doors, which are used to check a building’s insulation.

ACCION USA is currently talking with groups in Massachusetts and New York about leveraging microlending to help contractors jump into weatherization and/or aid those already in the game to expand to meet growing the demand. While many states have used government funding to provide incentives for weatherization, many of these incentives are rebates. And without the money to front the cost, many contractors are opting out.

By incorporating a microlending component into weatherization programs, contractors will be able to move quickly – reacting to the market. Once they’ve taken hold of the weatherization opportunity, these businesses will continue to flourish, in large part due to the education and credit training received with their microloans. So even after the nation has been duly weatherized, contractors will continue to employ and grow.

Do you think microlending has a part to play in weatherization?

Luz with her father, Carlos I. Gomez (1936-2006)

The StoryCorps Historias trailer came to town in late January and I had the opportunity to talk about why I’ve worked with small businesses for over a decade. My husband interviewed me about my dad, Carlos Gomez Arriola, who passed away in 2006.  If you haven’t heard about StoryCorps, it’s an amazing oral history project that travels throughout the U.S.

Dad was a proud immigrant from Medellin, Colombia who owned his own home-based company in Los Angeles—COEXPO—for 30 years.  When I started working with ACCION in New York, he came to visit several times and I would drag him along to site visits of clients all over the five boroughs.  He even sat in on credit committee meetings! And when I moved to Miami to start ACCION’s Miami operations, he was there too, helping set up office furniture or providing advice for working with export clients.  He totally got the concept of this work since he himself didn’t qualify for financing when he was first starting out in the early 1970’s.  Even though I didn’t take over the reigns of his business, you could see that the importance of supporting small business was not lost on me.

So if you’re working in microfinance today—tell us your story about why you got involved.

ACCION USA provides taxpayers with the financial education and resources they need to make smart, informed decisions about RALs.

And so it begins. Tax season. The time of year when tax prep software commercials sandwich prime time TV shows and your friends in the tax prep industry sleep on office couches. For many like myself, it’s another opportunity to procrastinate for four months and then spend my entire refund on priority mail.

Unfortunately, this time of year is also notorious for coercion and scheming, and the latest trend is in refund anticipation loans (RALs). A tax preparer may advertise these loans as “instant loans” or “instant refunds” – in reality, the only instant thing about them is the speed with which your real refund will shrink.

Here’s how it works: your tax preparer offers you a RAL; you accept the offer and sign a document, which is essentially a loan agreement authorizing the preparer to use your refund as a guarantee, with interest rates as high as 50-500% a year; the loan is (instantly!) approved; you walk away with fast cash but actually receive a significantly smaller refund; and the tax preparer makes one hefty profit.

Certainly, the tax prep industry provides a highly-demanded service for many, many people. But according to the Woodstock Institute, 8.67 million taxpayers received RALs in 2007. A RAL may very well have been an appropriate solution for some of these individuals, but I will venture to guess that they comprise only a small portion of that 8.67 million. What about the millions who are essentially handing over their hard-earned money? I believe the answer lies in education and empowerment.

ACCION USA’s financial education team is on top of this. We have already distributed an article addressing RALs, and we are featuring RALs in our online tip of the month. In addition to educating clients on the implications of refund anticipation loans, we also provide them with valuable resources, including smart alternatives to RALs, lists of free tax preparation locations (including our Miami, FL office), and helpful websites. These resources not only have the power to produce more informed taxpayers; but they also have the potential to mold a new generation of educated, responsible, and empowered consumers.

This type of generational change may not be instant – but in terms of the return, the investment is surely worth the wait.

• The lending crunch: ‘It is very hard to survive’- CNN
• 4 Lending Innovations That May Help Small Business- Entrepreneur.com
• At Shared Offices, How Green Is My Work Space- New York Times
• Initiative lends stability to aspiring city entrepreneurs- Daily Targum

To start, ACCION USA staffers in each office volunteered to be a green champion— each responsible for surveying our current green (or not-so-green) status. The survey considers the following:

• Facilities and Energy Use: Utilities, Lighting, Electronics, and HVAC
• Water Conservation
• Waste: Reduction, Recycling, and Printing
• Green Product Purchasing
• Transportation

The survey will help the green committee determine ACCION USA’s baseline. Once the baseline is established, we’ll be able to create a plan and track our progress (which, of course, we’ll report back to all of you!).

To rally our entire organization around the green theme, the committee will be throwing a St. Paddy’s Day pot luck and, you guessed it, staff will be asked to bring their favorite green (or green-colored) food. And, of course, we’ll post pictures.

Read more about the Energy Star Challenge and sign up to take it yourself!