ACCION USA: From Pioneer to Leader in U.S. Microfinance
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ACCION USA: From Pioneer to Leader in U.S. Microfinance

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A presentation created in Webinar format and presented by Luz Gomea, detailing the history of ACCION USA and U.S. microfinance.

A presentation created in Webinar format and presented by Luz Gomea, detailing the history of ACCION USA and U.S. microfinance.

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  • Welcome --- This webinar is designed to introduce you to ACCION USA and the history of our organization and the services we offer to small businesses. The webinar also outlines the history of microfinance in the United States and how ACCION USA fits into that broader picture. Throughout the presentation, you will become familiar with the need for microfinance in the U.S., the clients we serve, and the current small business environment.
  • ACCION International a group of law school students, headed by Joseph Blatchford, to serve pressing community needs in Caracas, Venezuela. fledgling "ACCIONistas" were soon working closely with local residents to identify the most pressing community needs. Together, volunteers and residents installed electricity and sewer lines, started training and nutrition programs, and built schools and community centers. Over the next ten years, ACCION started similar volunteer programs in three more countries: Brazil, Peru and Colombia. ACCION placed over 1,000 volunteers and contributed more than $9 million to development in some of the poorest communities of Latin America. By the early 1970s, ACCION’s leaders began to realize that their volunteer efforts didn’t impact a root cause of the poverty they were seeing – that is, the lack of economic opportunity. Many rural residents were migrating to urban centers in search of work, and when they couldn’t find any opportunity in the over crowded city centers, these migrants would start their own small enterprises, whether it was weaving belts or selling fruit. In order to buy supplies, many were borrowing from local loan sharks at rates as high as 10% per day. ACCION staff note this need in Recife Brazil, and began to issue small loans. To our knowledge, these loans in Brazil were the first microfinance loans doled out globally. ACCION really envisioned a world in which financial systems work for the poor so that they have the same opportunities to create and grow businesses as those with higher incomes. By bringing financial services to people who have historically been ignored by banks, ACCION has helped inspire a whole new kind of banking: microfinance.
  • ACCION’s microfinance programs spread throughout Latin America to 14 countries. ACCION’s model of microfinance is highly successful: they offer small, short-term loans that can build confidence and a credit record, and visit the site frequently. Meanwhile, many of the same issues facing microenterprises in Latin America resonate with small business owners back home in America. So, in the late 1980s, ACCION looks into applying their same microlending model to the U.S. market. Also during this time period, in 1977, Congress passes the Community Reinvestment Act, or the CRA. The CRA seeks to eliminate discrimination among banks and savings institutions to loans made to individuals and businesses in low and moderate income communities. All banking institutions that receive FDIC insurance must offer credit (in a ‘safe and sound manner’) to all neighborhoods in communities they serve. Today, one of the ways banks comply with the regulation is by investing in microfinance institutions, which specialize in making microloans to small businesses that are not ‘bankable’.
  • By the late 1980s, the microenterprise development field really began to gather steam, as we can see from the rise of various organizations during the 80s like Self Help, Working Capital, CFED, among many others. Here we can see WHY the field of microenterprise development really gained a foothold and starting growing rapidly in the U.S. During the early 90s the field started to move forward because of the convergence of three socioeconomic trends: Political debate emerging over the effectiveness of government entitlement programs to help the poor escape poverty. The need to reform welfare became evident – this was taken up by Clinton during his first administration with the passage of a landmark welfare reform bill. Part of his bill was the idea that individuals should be encouraged to support themselves through employment, including self-employment. Corporate Downsizing – reducing their workforce, jobs moved overseas, self-employment as an alternative to working for a larger company Demographic changes that encouraged self-employment : increasing percentage of women in the workforce; women often use self-employment as a way to bridge the demands of family and work. more immigrants populatino over 50 begins to see self-employment as a way to continue generating income Census stats, survey of business owners which is conducted every 5 years: The number of businesses owned by minorities in the United States increased 60 percent between 1987 and 1992. This compares to an increase of 26 percent for all U.S. firms, from 13.7 million in 1987 to 17.3 million in 1992. Women, same survey: Previous surveys have covered women-owned unincorporated businesses and subchapter S corporations, and in the past five years the number of women-owned "non-C" businesses has increased 43 percent Also, there was a growing awareness that the microenterprise field was more much advanced in developing countries, and that there were a number of successful organizations that lent money to microentrepreneurs and provided business assistance. These trends combined to increase the visibility of self-employment as an economic and poverty alleviation strategy and pushed the microenterprise field further along into the new decade.
  • There were a variety of organizations founded in the 80s that had similar missions of community economic development through financial services. In 1980, Self-Help was founded in Durham, NC. Self-Help started just providing management assistance to worker co-op businesses in North Carolina. A couple years later, they established a division for financing, which would help disadvantaged individuals build wealth through home ownership and small business ownership. The Corporation for Enterprise Development, or CFED, was founded in 1981. CFED is a public policy think tank that advocates for economic opportunity in low-income communities. They also have a variety of programs, mostly focused on savings, that helps disadvantaged communities build financial assets through matched savings programs. In 1990, Working Capital is formed in New England, serving Massachusetts, Vermont, and New Hampshire. Working Capital was one of the country’s first microlenders – targeting the owners of very small, often part-time and start-up businesses in low-income communities. Its peer group lending methodology was adapted from microlending programs in the Latin American programs. Through its peer-lending program, Working Capital extends credit to self-selected groups of members who review and approve each other’s loans, with no secondary review or collateral required by Working Capital. This decentralization of authority was a hallmark of the Working Capital methodology, and was inspired by FINCA’s village bank model. Although domestic microfinance typically doesn’t use the group lending model of most international microlenders, Working Capital is an example of such tactics succeeding in the U.S. too.
  • So - late 80s and early 90s we have self-employment as well as a growing awareness of microenterprise and the informal economy in developing countries, gave a direction and a methodological framework for the emergence of the microenterprise field in the U.S. Amid this national trend, ACCION USA steps in. In 1991, ACCION pilots its microlending program in Brooklyn, and makes its first official loan in July of that year. Here begins ACCION USA’s path in the domestic microfinance industry. Also in 1991, the Association for Enterprise Opportunity, or AEO, is formed. AEO is really a trade organizations for the microenterprise development field. AEO is a national membership organization and a voice of microenterprise development in the United States. AEO represents the public policy interests of its members and, through its growing network of partners, facilitates interactions among small entrepreneurs and the organizations that seek to help them succeed.  AEO also made a significant contribution to the field by defining microenterprise as having five or fewer employees and requiring less than $35,000 in start up capital; also by definition, they do not have access to the commercial banking sector. Also during this time period – in 1991 to be specific – the Small Biz Administration, or the SBA, officially recognized microenterprise as a separate category of business. Traditionally, the business sector had been categorized into three groups: large, medium, and small, where small business was defined as having up to 500 employees. Clearly microenterprises operate on a vastly different scale than a business of 500 employees, or even 50 employees, and should be treated differently.
  • Building on the success of ACCION New York, the U.S. ACCION network expands in 1994 with the launch of four associated licensees throughout the country: ACCION Texas, ACCION San Diego, ACCION Chicago, and ACCION New Mexico • Arizona • Colorado. These four licensees are essentially franchises of ACCION USA – they are authorized to use the name and logo, but are independent nonprofits with their own legal status, management, board of directors, and fundraising schedule. **Explain t he US map here … each blue state indicates the location of a licensee** Jamie and Michael Ford: ACCION New Mexico clients from their early days. The Fords have just worked their way off welfare and into self-sufficiency with their own entrepreneurial energies and the help of microloans from ACCION New Mexico. Once, the Fords had a house surrounded by green grass and a new car to drive their children to school. In those days Jamie made $30,000 a year as an office manager and Michael worked for the local cable company. A "typical" American family, the Fords saw their good fortune fail. Jamie suffered a shoulder injury that cost her the office position and left her unable to hold down a regular job. Then Michael lost his job at the local cable company. Forced to turn to food stamps and welfare, Michael and Jamie decided to create their own business. With the help of a friend, the Fords converted an old industrial kettle into a gas-fired popcorn popping machine. They started selling their flavored popcorn- flavors like "New Mexico Red Chile"- at flea markets and festivals. The Fords may not sound like a good credit risk, but ACCION New Mexico loaned them $250. "On paper the Fords had little that a bank would have recognized," says loan officer Marissa Barrera," but they were obviously committed to making the business work. We just had faith that they would repay the loan." The Fords used the money to print business cards. Within three months the Fords had repaid that loan and borrowed $500, which allowed them to print labels for the popcorn bags. "We really saw an increase in calls once we had those labels with our phone number on the bags," Jamie says. "The labels brought us business." With their profits, the Fords started a second business selling hand-tied fishing flies. Michael, a stream fishing enthusiast, taught himself to tie flies when he couldn't afford to buy them. Sales have quadrupled, making the popcorn business now more of a hobby. The Fords are just about to make the last payment on their third ACCION loan which was for $1,000. "I've got so much work that I don't know which side is up," said Michael
  • In 1997, President Clinton awarded the U.S. ACCION Network (includes all the licensees) the Presidential Award for Excellence in Microenterprise Development for Program Innovation, a highly prestigious award that recognizes organizations that have demonstrated excellence in promoting micro-entrepreneurship. Hillary Clinton was actually a huge advocate for microenterprise development, and pushed her husband to pursue various programs throughout his tenure that supported small businesses in the U.S. and internationally. One such example is the Small Business Administration’s (or the SBA) Microloan Program, piloted in the early 90s and made permanent in 1997. The SBA itself does not grant loans (with the exception of Disaster Relief Loans) . Instead, the SBA guarantees against default certain portions of business loans made by banks and other lenders that conform to its guidelines. SBA’s Microloan Program was developed to increase the availability of smaller business loans to prospective small business borrowers. Under this program, the SBA makes funds available to nonprofit intermediaries, like ACCION USA, who in turn make loans to eligible borrowers.
  • In 1998, the Aspen Institute begins its FIELD program, or the Microenterprise Fund for Innovation, Effectiveness, Learning, and Dissemination, which becomes a leader in researching the impact of microenterprise instiuttions in the US. ACCION USA does collaborative research with the FIELD program annually: their MicroTest study evaluates the direct impact of microloans through a random sample of our clients. Also in 1998, ACCION published the first comprenhensive study about the impact of microloans on clients. The study encompassed the whole US ACCION Network and studied 849 borrowers over the period of 2 years. The results provide tangible proof of the vast positive impact on borrowers: clients reported a 54% increase in take home pay, 47% growth in business profits, and a total of $1 million in new business assets created when aggregated. At the turn of the century, ACCION USA reaches 21.2 million in dollars disbursed to 3,500 individuals, and boasts a 96% repayment rate.
  • Right after the 10 th anniversary of ACCION USA’s birth, the attacks of September 11 th occur. ACCION New York begins a special project after the attacks to help business owners who were affected by the disaster. They establish the ‘American Dream Fund’, which offers lower-interest loans to eligible business owners. Luis Zepeda Alvarez, pictured here on this slide, is one example of a client affected by the attacks. Luis was once unemployed and homeless – but his life changed when he found work making bakery deliveries for a local company. His regular route included a morning stop at New York’s World Trade Center, and on Sept. 11 th , he made his usual 8:30 AM stop. L:uis walked to his second stop before the attacks, however his truck was lost in the rubble. Rather than face unemployment for a 2 nd time, Luis decided to begin his own delivery service. When he found that the banks were not able to provide him with aloan due to his financial history, he turned to ACCION USA for the money he needed to purchase his first truck. ACCION USA gave him a loan from the American Dream Fund. Luis now operates a successful bakery delivery service with multiple routes throughout the city and has even received two follow up loans from ACCION USA. Also in 2001, ACCION USA merges with Working Capital, the New England microlender mentioned earlier in the presentation. Because of the merge, an ACCION USA office in Boston opens, which serves all the Northeast, focusing on the Greater Boston region. So far, the Boston office has lent $10.5 million.
  • In 2002, ACCION USA added a now-fundamental segment to our portfolio of services: free financial education. We noticed not only a general lack of financial literacy among the low- to moderate-income entrepreneurs we were serving, but also a base of common obstacles TO financial literacy. These common obstacles include langauge and cultural barriers for immigrant men and women, a lack of understanding regarding the U.S. credit/regulatory system, and insufficient recordkeeping necessary to demonstrate financial viability. To address these challenges, ACCION USA’s financial literacy program provides individuals with practical training and tools to manage their finances. We offer a comprehensive online database of articles, worksheets, and podcasts, in addition to regular local seminars and networking events. Furthermore, we provide one-on-one financial counseling, administered by our loan consultants and financial education team. Since the launch of our financial education program in 2002, we have served nearly 22,500 individuals, and in the past four years ACCION USA has disbursed 360 loans to individuals who have participated in our financial education activities. ***Click on the Link “ACCION USA’s Financial Education Program” to open up our online resource center*** **If participants want to view a video of a recent workshop, they can through Vimeo (type in chat box: http://www.vimeo.com)** In general, U.S. microfinance organizations all note that financial education is absolutely crucial for the success of lending programs. Because U.S. entrepreneurs operate in a country with a complex financial system with a lot of regulations, as opposed to very informal businesses springing up everywhere in developing countries, U.S. microentrepreneurs need education on how to operate in this formal business system.
  • In 2003, ACCION USA opens an office in Miami. Now, ACCION USA has three branch offices: Miami, Boston, and Atlanta. This is in addition to the five licensees at this point in 2003 – Chicago, New Mexico, Texas, New York, and San Diego. To date in Florida, we have provided 1,750 loans totaling nearly $9.8 million. The client pictured here is one of our many success stories from Miami, Odilon Celestin. As a new immigrant from Haiti, Odilon carried two part-time jobs in Miami, one at a carwash and another at a bakery. His two jobs provided more then just a steady income. He learned the basics of owning a business and developed an enjoyment for baking bread. He started to plan a lot and calculate what it would cost to open his own bakery. After three years Odilon had managed to save a respectable amount of money and had opened a bank account. However, when it finally came time to move forward with his business, he didn’t know anyone who could give him a reference and had no credit history, which made securing a loan close to impossible – until he heard about ACCION USA. Odilon applied for a loan and received $4000, which he used in addition to his own money to buy a $7000 oven. Odilon received two more loans from ACCION USA in the next couple years, one to buy a new mixer and cover legal fees, and a second to buy a company vehicle.
  • In 2006, ACCION USA took a step further to extend our reach nationwide: we instituted an online lending platform. By simply filling out a loan application online, anyone in the US can receive an ACCION USA loan. Applications are processed by the intake department in Boston, then doled out to loan consultants who deal remotely with clients. ***Describe the map. Light blue = internet availability, dark blue = licensees, yellow = ACCION USA branch offices. One of the main obstacles to self-sufficiency of US microlenders is the high cost of service delivery. Thus, lending online is not only a way to reach more clients, but also a huge milestone in the field of domestic microfinance because it can cut down costs so much. The organization Count Me In pioneered Internet lending to women entrepreneurs in 1999; although they discontinued it a couple years later to focus on technical assistance, just the concept of online lending could really help the industry. Lending online reduces transaction, underwriting, and servicing costs. ACCION’s online platform has disbursed almost 4 million in almost 600 loans nationwide.
  • Just as ACCION USA responded to the crisis of September 11 th , we also responded to the damage of Hurricane Katrina and Rita. ACCION USA partnered with Enterprise Corporation of the Delta (ECD)/Hope Community Credit Union to assist small business owners in Louisiana and Mississippi. The “Back to Business Loan Fund” has disbursed over $250,000 to a range of businesses hampered by broken infrastructure and severely limited resources, and in doing so, helped to revitalize the area. Don Harding, pictured here on this slide, is one of the many examples of clients served by the Back To Business Loan Fund. He was able to open his Cajun Grill again after damages by the hurricane with an ACCION USA loan.
  • ACCION USA has somewhat recently developed a strong network of volunteers that donate hours and hours of their time toward our mission. In 2007, five former ACCIONistas created the New York based Microfinance Council – which is a group of now 200 plus professionals who volunteer for ACCION USA. These young professionals actively participate with the Council by promoting microfinance among other professionals, providing strategic advice, and assisting in fundraising activities.  Since 2007, our volunteer program has grown quickly. We now have a Volunteer Coordinator on staff in New York, Erica Dorn, who manages 251 volunteers, who, combined, put in 31,627 hours in the past year alone.
  • Also in 2007 we reached a milestone amount in money lent: $100 million disbursed since inception. The graph shown on this slide is actually just annual lending numbers for ACCION New York, but shows that, as of 2007, we were on a continued upward trend in lending activity.
  • The financial crisis and subsequent Great Recession of 2007 and 2008 has vast implications on the availability of credit to all Americans, and especially small businesses. ACCION USA’s clients weren’t immune to the effects of the crisis, and many struggled to survive through the precipitious drop in consumer demand. Also in 2008, The Grameen Bank brings its operations to America. The Grameen Bank is the brainchild of Dr. Mohammed Yunus, perhaps the best known name in microfinance, and winner of the Nobel Peace Prize. Grameen America continues with the same model of microfinance as used by the Grameen Bank internationally: an individual who needs a loan gathers a group of 4 friends or family members, goes through a financial training program, and loans can then be obtained without a credit history or collateral. Grameen America opened a branch in Omaha, NE and is seeking further expansion in other states too. To support our clients through the hard times, ACCION USA implemented a hardship loan program, where current borrowers could refinance for lower monthly payments. Because credit troubles were part of the root problems of the financial crisis, and credit was such a hot topic in 2008 – ACCION USA launched the Build Your Credit campaign in partnership with AIG. This campaign built a financial education series about building healthy credit and how to manage credit. Throughout the course of the campaign, we reached over 2,000 individuals. In addition to credit education, we offered small ‘Credit Builder’ loans to individuals who lacked credit history. By easily paying back a small loan, and having repayment reported to the three major credit agencies, the borrower could build up a good credit score to then enter mainstream financial markets.
  • Also in 2008, in June, ACCION began a partnership with a new corporation: The Boston Beer Company. The founder of Boston Beer, Jim Koch, said he had so much trouble launching his business and getting bars to sell his craft beer that he decided to help other fledgling firms after he achieved success. Together, we created the Samuel Adams Brewing the American Dream Fund, which established a pool of money for loans to food and beverage entrepreneurs, as well as financial education seminars and events funded by Sam Adams. We also developed a speed coaching program that has been really successful in our Boston market. The speed coaching program brings together local food and bev entrepreneurs with industry professionals to provide one on one consulting. The picture on this slide shows one such event at the Sam Adams factory – Scott is an expert in sales and distribution, and is sharing his ideas and advice with an entrepreneur. While we’re on the topic of corporate partnerships – its worthwhile to talk about the other types of partnerships that are integral to our operations. We partner with a lot of banks both locally and nationally. The banks provide us with financial support, participation on the board of directors, referrals to ACCION of clients that the bank cannot serve, and execution of loan I ntakes and closings (in NM, ACCION has agreements with some banks wher eth branch employees help clients fill out the ACCION loan app). But it really is a mutually beneficial relationship in that the banks fulfill their Community Reinvestment Act (CRA) obligations by investing in the low-to-moderate income business community. Also, a bank prefers to refer a client to aCCION rather than reject them outright (the client may also come back to the bank later once they’ve b uilt up their credit).
  • In early 2009, former-licensee ACCION New York merges with ACCION USA to streamline operations and more efficiently serve the New York area. ACCION USA now has four branch offices – New York, Boston, Atlanta, and Miami. In June of 2009, Kiva began its first two domestic field partnerships with ACCION USA and Opportunity Fund in California. Kiva is an online microlending platform where individuals all over the world can lend as little as $25 to entrepreneurs through the medium of field partners like ACCION USA. ACCION USA has now lent to 100 clients through Kiva and raised over $500,000 from indivduals all over the country. <<>> In August of 2009 Michael Bloomberg, who is the mayor of NYC, names ACCION USA the Minority/Women Business Entity Advocate of the Year for our support and outreach to minorities and women. Currently, our New York portfolio serves ______ percent women and ____ latino and ____ percent african american.
  • ACCION USA received a lot of recognition for our quality work in 2009. In August, Bloomberg named ACCION USA the M/WBE Advocate of the Year. In October, William Mateo, the Program Director in Florida, was named the non profit organization leader of the year. We also launched a new partnership with the EPA’s SmartWay Transport program and the port authority of new york and new jersey. Long-haul truck drivers can go green, reduce fuel costs and increase profits with a state-of-the-art, eco-friendly equipment upgrade from EPA's SmartWay Transport Partnership and ACCION USA Obama’s stimulus money in 2009 supported microenterprise. The Recovery and Reinvestment Act added $50 million to support SBA microloans and an additional $24 in technical assistance training. This money was doled out to organizations that lend to and support microenterprise. ***Click link to see SBA announcement of new funds***
  • So far this year in 2010, we’ve taken on a variety of projects. In April we got our business involved in the green movement as we launched the Green Loan Program. Under the program, any small business owner looking to make an eco-friendly improvement to their business can now access a more affordable loan with ACCION USA. We have subsidized interest rates, 8.99% annually, and loan amounts up to $35,000 and terms up to 60 months. Racquel, pictured here, is a great example of one of our green borrowers. Raquel: When Raquel first got started, she had both a full time job and a commercial cleaning business which cleaned newly constructed houses before they went up for sale. Eventually Racquel discovered a franchise business which specialized in eco-friendly cleaning services – which could offer her more steady work and also tap into the growing market for eco-friendly practices, so she decided to go for it. She wanted to expand her franchise, but needed financing because she didn’t want to use her high-interest rate credit cards. She eventually found ACCION USA online and applied for a green loan. Today, business is so good that Racquel quit her full time job. Now she only uses only eco-friendly products in her green cleaning business, eliminating harsh chemical from her clients’ workplaces.  THE EL SALVADOR NATIVE LOOKS FORWARD TO BEING ABLE TO EXPAND HER FRANCHISE EVEN FURTHER IN THE FUTURE, AND HIRE ADDITIONAL EMPLOYEES In May, the leading players in domestic microfinance and enthusiasts nationwide convened in San Francisco for the 2 nd annual Microfinance USA, the nation’s premier conference on domestic microfinance. The national events mobilizes those involved in and curious about domestic microfinance. The two-day conference highlighted on a national level how microfinance produces jobs, increases incomes, and creates opportunities to build stable communities. The conference connects practitioners, investors, and individuals across the country Around 1000 odd people participated in the conference, including ACCION USA staff and interns. In June, ACCION USA was approved as an SBA microlender – meaning now we can take advantage of the guaranty backing of SBA Microloan funds. Under the SBA microloan program, loans up to $35,000 will be available at 8.99% annual interest rates in New York State. ACCION USA has already disbursed $323,606 in 32 loans using this SBA funding.
  • Include some facts about why we’re reaching out to women specifically. Currently only 40% of our portfolio is female – women are starting businesses at a faster rate than men.
  • To wrap up this presentation, I’d like to ask you to take a second to think about what small businesses look like in your community. Do you have small, locally-owned stores or restaurants? What would your community look like without these small enterprises? Probably less vibrant, less diverse. Here at ACCION USA we’re committed to serving those small, local businesses and helping them survive and grow. Does anyone have any questions about the presentation? **Short question and answer period *** **Give contact information for further thoughts/questions **

ACCION USA: From Pioneer to Leader in U.S. Microfinance Presentation Transcript

  • 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?