ACCION USA: From Pioneer to Leader in Domestic Microfinance

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Learn about the origins of ACCION USA and the domestic microfinance movement.

Learn about the origins of ACCION USA and the domestic microfinance movement.

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  • 1. ACCION USA: From Pioneer to Leader in U.S. Microfinance
  • 2. Our International Roots ‘ ACCIONistas’ in Recife, Brazil notice a vast network of small-scale entrepreneurs who lacked access to financial services. ACCION’s program in Brazil offers the first small loans to these microenterprises and in doing so launches the field of microcredit . ACCION International is founded by Joseph Blatchford and some fellow students to serve pressing community needs in Caracas, Venezuela. 1961 1973
  • 3. Branching Out ACCION helps start microfinance programs in fourteen countries in Latin America. Their distinct model of small, short-term loans with frequent site visits proves successful, and shows the world that the poor are indeed creditworthy. ACCION explores the possibility of bringing microfinance lending back to the US, intending to address the domestic economic realities of the time including unemployment, urban decay, and the economic marginalization of small business. Early 1980s Late 1980s Community Reinvestment Act (CRA) passed by Congress The CRA requires that federally regulated depository institutions respond to the credit Needs (directly or indirectly) of the communities where they operate, including low-income neighborhoods. 1977 Notable Legislation
  • 4. Socioeconomic Trends Converge Late 1980s, Early 1990s Corporate Downsizing Changing demographics Self-employment “ End welfare as we know it” International movements U.S. microenterprise development Listen to Bill talk about domestic conditions for microfinance Bill Burrus, President and CEO of ACCION International and leader of ACCION’s domestic movement
  • 5. Early Supporters of Microenterprise The Corporation for Enterprise Development (CFED) , a leading voice in promoting policies to expand economic opportunity for low-income families, is formed. 1980 1981 Self-Help is founded in Durham, North Carolina to provide management assistance to NC worker-owned businesses. Self-Help later shifts their focus to helping disadvantaged North Carolinians build wealth through home and small business ownership, and makes its first microloan later in the 1980s. 1990 Working Capital , a microlender that advocates for the peer group lending methodology, is founded in Massachusetts and expands its reach to most of New England.
  • 6. ACCION Enters the Scene ACCION pilots its micro-lending program in Brooklyn, New York with the mission of providing people with the financial tools needed to work their way out of poverty. 1991 Notable Legislation Small Business Administration recognizes microenterprises. The SBA defines microenterprise as a separate category of business and established the Microloan Demonstration Project The Association for Enterprise Opportunity , a trade organization for microenterprise development, is formed.
  • 7. Building a National Network 1994 Jamie and Michael Ford, winners of the ‘ SBA New Mexico Welfare to Work Entrepreneur of the Year ’ The U.S. ACCION network expands with the launch of four new associated licensees throughout the country ACCION Texas ; ACCION San Diego ; ACCION Chicago ; ACCION New Mexico • Arizona • Colorado.
  • 8. Recognizing Microfinance The U.S. ACCION network receives the Presidential Award for Excellence in Microenterprise Development The Small Business Administration (SBA) makes permanent its Microloan Program: The SBA program increases the availability of very small loans, from under $500 to $35,000, to small-business borrowers. The SBA provides funding to nonprofit intermediaries, which then actually disburse the loans. Notable Legislation 1997 January “ These awards for excellence in microenterprise development simply recognize that our country has been and will be built on the enterprise of our people -- on their ideas, their energies, their willingness to take risks, their willingness to pursue their dreams.” - President Clinton, presenting the Presidential Award to the U.S. ACCION Network
  • 9. Measuring Microfinance 1998 The Aspen Institute launches the Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination (FIELD). FIELD tracks the industry, documents its outcomes and invests in innovative ideas. $21.2 million lent to 3,500 low-income entrepreneurs, 96% repayment rate 2000 ACCION release the results from the 1st comprehensive study of 849 borrowers: December
      • 54% increase in take home pay ($455/month)
      • 47% growth in business profits
      • $1 million in total business assets created
    An Atlanta office of ACCION USA opens
  • 10. Helping Build the ‘American Dream’ In response to the attacks of September 11th and resulting devastation, the ACCION New York ‘American Dream Fund’ is established. The Fund provides low-interest loans to small business owners affected by the attacks. 2001 September October ACCION USA merges with New England microlender Working Capital to offer credit and business development services to more entrepreneurs in the Northeast. A Boston office of ACCION USA opens, and has since lent $10.5 million. Luis Zepeda Alvarez, an ACCION USA client who received a loan after 9/11 and now owns a successful bakery delivery service
  • 11. A Need for Greater Financial Literacy ACCION USA notes a disproportionate lack of financial literacy among low- to moderate-income individuals, and develops a free financial education program that gives business owners the tools and resources they need to survive and grow. 2002
    • ACCION USA’s Financial Education Program
    • Workshops
    • Mentoring & Networking
    • Webinars
    • Online Resources
  • 12. Southern Expansion ACCION USA opens an office in Miami to serve the small business needs in Florida. 2003 “ ACCION USA has been a great community partner… assisting the small businesses in the city of Miami with the credit and that they have needed to grow and flourish in our community. This is of utmost importance … small businesses create much-needed jobs and act as the engine of our local economy.” - Manny Diaz, Mayor of the City of Miami, 2001-2009 Odilon Celestin, an ACCION USA client from Miami who received several loans to open and grow his bakery
  • 13. Nationwide Expansion ACCION USA rolls out a milestone Online Loan Application that for the first time extends economic opportunity to small business owners to all corners of the US. 2006 February
  • 14. Responding to a National Disaster Responding to the damage of Hurricane Katrina and Rita, ACCION USA creates the “Back to Business Loan Fund” to assist small business owners in Louisiana and Mississippi. 2006 Don Harding, an ACCION USA client and proud owner of the Cajun Grill in New Orleans “ With all of the struggles Katrina caused and how hard it is to find financing, I contemplated leaving everything behind and moving to Houston. But the loan from ACCION USA allowed me to stay open” - Don Harding
  • 15. Volunteerism and ACCION USA 2007 October Five former ‘ACCIONistas’ create the New York-based Microfinance Council , a forum of professional volunteers for ACCION USA. Our 2009 Volunteer Program by the numbers: • 61 projects • 245 volunteers • 29,935 hours • $ 598,700 value
  • 16. Upward Trend of Lending Both ACCION USA and ACCION NY reach a milestone of $100 million in total loans disbursed since inception 2007 November
  • 17. Responding to the Financial Crisis Build Your Credit Campaign : In the midst of the economic crisis, ACCION USA seeks to educate low-to moderate-income individuals about the importance of a credit history and responsibly managing credit. The Build Your Credit campaign provides credit education to over 2,000 individuals throughout the country. 2008 2007 U.S. financial system shaken by the financial crisis; credit becomes tighter for all Americans ACCION USA institutes a “hardship loan” program, where current borrowers can refinance for lower monthly payments May The Grameen Bank launches its first branch in Queens
  • 18. Building Meaningful Partnerships ACCION USA partners with The Boston Beer Company for the Samuel Adams “Brewing the American Dream Fund” 2008 June ACCION USA, in partnership with ACCION International, celebrates its 5 th consecutive year of winning Fast Company’s Social Capitalist Award A speed coaching event in Boston hosted at a Sam Adams warehouse
  • 19. Achieving Efficiency and Scale 2009 June January Licensee ACCION New York merges with ACCION USA. Kiva , the online person-to-person microlending program , partners with ACCION USA and Opportunity Fund as its first two domestic field partners. Images of ACCION USA Kiva clients Tony, a client who was featured on Kiva, here with his hot dog stand in New York. Gina Harman signs on as the new CEO of ACCION USA
  • 20. Awards for ACCION USA 2009 President Obama’s American Recovery and Reinvestment Act of 2009 adds $50 million in additional financing to support SBA-backed microloans as well as $24 million for technical assistance training. August Michael Bloomberg, mayor of New York City, names ACCION USA the Minority/Women Business Entity Advocate of the Year for its leadership in supporting entrepreneurship among minorities and women. ACCION USA partners with the Environmental Protection Agency for the Port Authority Truck Replacement Program March Notable Legislation
  • 21. ACCION USA Goes Green ACCION USA launches the Green Small Business Loan Program , intended to jumpstart local environmental change. 2010 April ACCION USA is approved as a U.S. Small Business Administration (SBA) microlender. June Raquel, an ACCION USA client and recipient of a ‘Green Loan’ May Microfinance USA, the nation’s premier conference on domestic microfinance , is hosted in San Francisco for a group of around 1000 participants.
  • 22. Looking Forward 2010/2011 Women’s Program prepaid cards twentieth anniversary of serving hard-working U.S. entrepreneurs university partnerships speed-coaching Small business boot camp MicroBike alternative products
  • 23. Further Thoughts More questions or comments? Contact Erica Dorn at ACCION USA [email_address] What does small business look like in your community?