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
Banks Not Looking So Peachy in Georgia
A down real estate market has hurt many Georgia banks.
A post from Veronica Tong in the ACCION USA Georgia office:
With yet another local bank failure over the weekend in the state of Georgia, things are not looking peachy in the Peach State. Of the 64 banks that have failed this year, 16 of them are from Georgia. In fact, Georgia has the highest number of failed banks in the entire country. As if the stats don’t speak for themselves, Georgia was even dubbed the unflattering title “Chernobyl of Banking” by a banking expert in the Wall Street Journal. And this is not the worst of it. According to the WSJ, there are 30 local banks currently at risk and more are expected to fail.
How did Georgia get here? As a metro-Atlanta resident, I have always marveled at how quickly new chic condos, shiny new office buildings, and new trendy strip malls boasting rows and rows of parking spots seem to pop up overnight. With Atlanta being the fastest growing city in the nation from 2000 and 2007, metro Atlanta’s robust growth stimulated enormous suburban commercial real estate development, but it also brought in a rush of new community banks hoping to capitalize on the boom right before the economy collapsed.
So who suffers? Small businesses who rely on their banking relationships with smaller community banks to help them surpass steep collateral requirements and other hurdles typical at larger financial institutions. As a Georgia resident, I would rather brag about our peaches, our state’s largest aquarium in the world, our Atlanta Braves, our state song made popular by Ray Charles, and even about the stellar ratings of Real Housewives of Atlanta before I get to the dismal bank failure statistics. But these numbers are a reflection of reality – the reality that small business owners need guidance and financing to keep their businesses afloat now more than ever before.
Though it may be a tough time to be in lending, it’s a proud time to be in microfinance, which may be Georgia’s best hope for getting affected small business owners back on their feet. Not only can microloans alleviate the current lack of supply in credit, successful microenterprises will also create jobs and fuel business growth, which are the keys to economic recovery. With small business owners’ and micro-entrepreneurs’ increasing unmet demand for credit, I believe there is no better time than now for ACCION USA in Atlanta, and in the rest of the country, to step up and help displaced small business owners by filling the void of failed banks.
You’d Never Guess (or Would You?)
Which state is number one in entrepreneurship in the nation? That’s right: our very own state of Georgia. I, too, was surprised to learn of the findings of the Kauffman Foundation’s 2008 Index of Entrepreneurial Activity, released earlier this month. Georgia ranks first, with 580 entrepreneurs per 100,000 adults, and our capital Atlanta tops U.S. metropolitan cities with 740 per 100,000 adults!
Home to more than just peaches, Georgia ranks first in entrepreneurs per capita.
Then again it should not have been a surprise given that working at ACCION USA we come in daily contact with many budding and seasoned entrepreneurs. So we like to think that we had something to do with Georgia’s ranking. Last year, ACCION USA Georgia alone helped 134 entrepreneurs with $751,082 in loans. Interestingly, Massachusetts and New York, where two of the other ACCION USA offices operate, follow in the third and fourth spot. Impressive, right? And there’s good news throughout the country, with all regions showing an increase in entrepreneurial activity from 2007 to 2008. With our Internet lending we reach out and help entrepreneurs all over the nation, so “yay” to us ACCIONistas (and goes without saying our many colleagues and partners in the microfinance field).
Kudos also go to the small business owners: the Index reports that it is the smallest businesses just like our clients (a good percentage of which are immigrant-owned) that drive this trend. Larger businesses, on the other hand, show a decline in entrepreneurial activity, which is not surprising given the current state of our economy. Small businesses come to the rescue, yet again, and tackle recession by creating jobs and increasing prospects for their families, employees and communities. This just goes to prove that ACCION USA’s mission is right on target. So the next time you come across an entrepreneur who is looking for help with starting or growing a business, send him/her our way; chances are there is one right around the corner.
As for us down South, that person is probably sitting right next to you. So if the rest of you still think the South is laid back – a common (mis)perception – think again all y’all. Come visit Georgia, the state of entrepreneurs (oh, yes, and peaches too).
Tags: accion, accion usa, accion usa georgia, atlanta, entrepreneurs, entrepreneurship, georgia, kauffman foundation, small businesses