For Luis Zepeda Alvarez, a microloan paved the road to self-renewal. For over seven years, Luis has woken at 2:00 a.m. to begin delivering baked goods to delis and restaurants throughout New York. Although the streets are still dark, Luis doesn't mind the early start — it's a small price to pay for the independence that owning his own business provides.Luis's road to self-employment was not easy. Once unemployed and homeless, Luis's life changed when he found work making deliveries for a local bakery. His regular route included a morning stop at New York's World Trade Center, and on September 11, 2001, he made his usual 8:30 a.m. stop. Luis was walking to his second stop before the attacks; his truck, meanwhile, got lost in the rubble. Rather than face unemployment for a second time, Luis decided to begin his own delivery service. But Luis didn’t have the cash to buy a delivery van — and no bank would lend to him. AUSA recognized Luis’ entrepreneurial spirit and valued his experience enough to give him a loan to purchase his first truck.Luis's business has grown steadily ever since. He now runs three daily delivery routes and has hired other employees. Ten years ago, Luis was depending on spare change. Today, he relies on himself and is proud of the life he is leading, the future he is creating for his family, and the opportunities he is building for his business and community.
ACCION USA Presents Microfinance 101
ACCION USAMicrofinance at Work in theUnitedStates<br />
ACCION- helping millions help themselves<br /><ul><li>Starting in the 1970s, experimental programs in Bangladesh, Brazil, and a few other countries extended tiny loans to groups of poor women to invest in micro-businesses.
ACCION International was founded in 1961 to address the desperate poverty in Latin America's cities. Begun as a student-run volunteer effort in the shantytowns of Caracas, Venezuela, ACCION has a network of lending partners that spans Latin America, Africa, Asia and the United States.
In 1991, ACCION piloted a program in Brooklyn, New York after seeing many entrepreneurs from Latin America facing a similar challenge of financing in the U.S.</li></li></ul><li>Domestic Microfinance<br /><ul><li>1991: Pilot program in Brooklyn, New York
Loans range from $500 to $50,000; average loan is $7,500
Historical repayment rate: over 92%</li></ul>Source: www.accionusa.org<br />
ACCION U.S. Network<br />The U.S. ACCION Network is a coordinating and resource building entity among five regional offices which elevates the work of the members to create world class microfinance institutions.<br />ACCION Chicago<br />ACCION New Mexico-Arizona-Colorado<br />ACCION San Diego<br />ACCION Texas-Louisiana<br />ACCION USA<br />
Network Wide Impact<br /><ul><li>$305 million: total dollar value of loans made since inception
41,226: total number of loans made since inception
90%: historical loan repayment rate</li></li></ul><li>Our Mission<br />ACCION USA empowers entrepreneurs to invest in their business, family and community through financial literacy and capital.<br />
The need for microfinance in the U.S.<br /> There are over 20 million microenterprises in the United States but less than 1% are receiving credit or business assistance due to factors such as:<br /><ul><li>Lack of credit or low credit score
Some industries are considered to be high risk
45% are first-time borrowers</li></ul>65% Latino<br />20% African American<br />40% Women<br />Source: 2009 Impact Study and ACCION USA Portfolio as of 12/31/2010<br />
Loan Requirements<br />Have a credit score of 575 or more. <br />Have not have declared bankruptcy in the past 12 months or foreclosure in the past 24 months.<br />Have not had any late rent or mortgage payments in the past 12 months.<br />Be up-to-date on all bills.<br />Exhibit steady cash flow and the ability to support monthly loan payments. <br />Be able to provide a cosigner, if needed.<br />If you have a mortgage, it must be fixed-rate or an adjustable rate mortgage that does not adjust during the term of the loan.<br />
Loan Process<br />STEP 2:.<br />Client submits documents and is interviewed by a loan consultant<br />STEP 1:<br />Client applies for a loan and is quickly informed about eligibility and loan size<br />STEP 3:<br />Application is reviewed by the underwriting team.<br />STEP 5:<br />Repayment begins or the client is referred to an organization to improve loan eligibility<br />STEP 4:<br />Loan is dispersed if approved<br />
Our Impact<br />We create sustainable businesses: The business survival rate among ACCION USA clients is 98% for established businesses and 89% for start-up businesses.<br />We create employment in low-to moderate-income communities: On average, each ACCION USA small business loan recipient creates 3 jobs (including the borrower).<br />We create fair wages: Jobs created by ACCION USA borrowers pay 33% more ($10.80/hour) than the federal minimum wage ($7.25/hour).<br />We improve their quality of life: Clients reported a 19% median increase in take-home pay in the midst of economic distress.<br />Source: 2010 MicroTest Outcomes Survey in partnership with the Aspen Institute <br />
Stories of Success-Partnerships<br />Luis Zepeda Alvarez<br /> An ACCION USA borrower featured on Kiva<br />1 The Small Business Share of GDP, Katherine Kobe, Economic Consulting Services, LLC; 2 The Small Business Administration (2006) <br />
How can you get involved?<br />Tell business owners about ACCION USA - they can apply online at www.accionusa.org<br />Sign up for our news about upcoming events and important news in microfinance on our website at www.accionusa.org!<br />Attend our upcoming Microfinance Harvest Event on November 1st. Email Erica to attend firstname.lastname@example.org<br />