Wendell Brock - Friday, February 26, 2010

When Ted Terrazas retired from the US Air Force as a Medical Services Officer, he entered civilian life having learned a few things about delivering timely, efficient, and cost-effective medical care. Starting a medical consulting firm was the next logical step. Except such a venture couldn’t be launched from Mr. Terrazas’ garage, or with family loans.

But with a $10,000 loan from micro financier ACCION Texas, Mr. Terrazas was able to found TerraHealth in 2001. In the company’s first five years, it enjoyed an 8,000% growth rate. And in 2006, Mr. Terraza joined ACCION Texas’ Board of Directors, giving back to an organization that had done so much for him.

Make it Better
ACCION Texas’ reach isn’t limited to new businesses. In 2004, Guadalupe Perez was co-owner of a thriving café in El Paso when her partner decided she didn’t want to be in the restaurant business anymore. Ms. Perez either had to buy her out or sell the café. Because of a loan from ACCION Texas, she’s now Navajo Café’s sole proprietor.

ACCION Texas began in 1995, and last year expanded next door into Louisiana. Good things multiply. It’s also worth noting that ACCION Texas began as a franchise of ACCION USA, which has lent $117M nationwide since its inception in 1991.

Common Ground
In May, the Microfinance USA conference will commence in San Francisco. The location could not be better. Not only does California have America’s largest economy, its 12.4% unemployment rate (December 2009) is one of the nation’s highest. Californians know firsthand about the need for economic assistance, and not in the form of unemployment benefits extensions.

Microfinance USA will include people from all sides of this burgeoning industry—investors, government representatives, and small business owners—with the goal of helping American small businesses.

Road to Recovery
Depending on the day or the news source when you check the news—our economy is either slowly approaching a road to recovery, or still stuck in a pothole without a tow truck. Statistics can be crunched in any number of ways to any number of effects, but what we know for sure is that things aren’t great for a lot of people.

But where large banks and our federal and local governments haven’t been able to help, micro finance groups—like ACCION Texas, the PLAN Fund and many others who’ll converge on San Francisco this May—are effecting real change. As CREED grows we will begin this year to start developing a database of micro-enterprise business plans and proposals for enterpreneurs to access, so they can start their own business venture with a solid base.

Wendell Brock - Friday, February 12, 2010

When Mohammed Yunus and Grameen Bank won a Nobel Peace Prize in 2006, micro lending became a household term. Yunus had been giving micro credit for decades, though, making his first loan to Bangladeshi basket weavers in 1974.

The United Nations beat the Nobel Prize committee to the issue by a year, designating 2005 the InternationalYear of Microcredit.

But for any global issue, one year is hardly enough.

The Year of Microcredit’s website says, “The Year will be successful if 2005 is considered one pivotal chapter in the promotion and development of inclusive financial sectors. Considerable follow-up at all levels after the close of the Year will help sustain the momentum achieved by the Year observance.”

While we must have reasonable expectations, the momentum’s still here in 2010. A quick Google search finds that, just this year, micro credit companies have popped up in Kyrgyzstan, the Philippines, and Indonesia. As well as in the United States, there are several micro finance companies - many are operated as non-profits, likeAccion Texas and the PLAN Fund.

Micro Lending Primer
While terms vary, there are a few guidelines that most lenders follow

• Loans are based on trust rather than collateral
• Loans are paid back in very frequent installments
• Borrowers must join a borrowers’ group for support, advice, and accountability
• Micro lending helps people help themselves.

First-responder Lending
A current Newsweek article sheds light on Fonkoze, Haiti’s largest micro financier. Not only does it assist people in ordinary times, but it is also making disaster-specific loans following the January 12 earthquake.

While Haiti’s traditional banks were (and still are) in ruins, Fonkoze began lending money two weeks after the earthquake.

Because micro finance units know the specific needs of their customers—this is how they do business, with small loans to individuals—they’re better equipped to handle disasters that hit their customers. The Newsweek article asks, “Could microcredit be the new Red Cross?” While it can’t completely replace disaster aid, it can play a part.

“Chemen Lavi Miyo”
Fonkoze’s primary program—which means “the Road to a Better Life”—is micro lending in non-disaster times. A video on their website tells the stories of several women who’ve received micro loans.

A mother of four children says that, before Fonkoze’s loan, “I didn’t even have a chicken. Now I have 18 ducks and chickens and eight goats. I have standing in this community. … For the first time in my life, I have the resources and knowledge to grow food and earn money.”

Micro financing has done much to help the poor improve their lives, but much more still needs to be done.

Wendell Brock - Thursday, February 04, 2010
After the 7.0-magnitude earthquake hit Haiti on January 12, first-response teams flew in from all over the world to assist in rescue efforts. Two of these groups were armed with a software program called Decisions for Heroes, which assists first-responders in disasters, missing person searches, and other rescue operations. Because of their efforts, countless lives were saved.

Decisions for Heroes got off the ground thanks to the iQ Prize, a contest in Ireland that sought to fund the best business proposal and, in the process, kick-start the Irish economy.

CREED’s Venture
Now, CREED is undertaking a similar project here in America. But unlike the iQ Prize, CREED’s award money won’t come from a single company; instead, the money will come from people like you. And business proposals won’t be limited to Internet start-ups; our Crowdfunding initiative will award $5,000 to the most viable business plan in any sector.

Main Street Traffic Jam
American small businesses are responsible for about half of our country’s GDP and more than half of the employment, with the single largest employer sector being businesses with less than 10 workers (Wikipedia). We all know that small businesses are critical to our economy, and yet their small size makes them vulnerable to the changing tides of this uncertain economy. Just staying afloat is a challenge for many established businesses, but even tougher is the task of starting a new business. And yet, innovation is exactly what our country needs right now.While our political parties and government branches quibble about how to help our small businesses, you can take an immediate, active part in getting a new business off the ground by participating in CREED’s Crowdfunding initiative.

Your Part
Outvesting, a crowdfunding initiative that sought 50-euro donations to fund the best business idea, surpassed its 5,000-euro goal and was able to award 5,806.75 to its first winner, Kildare Street.While I think Americans are generous enough to beat and exceed our $5,000 goal, too, this is what we need to launch the project. Once the amount is reached, we’ll begin accepting business plans/proposals from entrepreneurs.In exchange for one $50 donation, you’ll receive one vote to cast for what you believe is the most viable business plan. Each additional $10 donation is worth another vote.In this way, you’ll be using your financial resources and business experience to help an entrepreneur. The quicker we reach our fundraising goal, the quicker we can award startup funds to a new business, and help restart our economy. So, grab your bucket, join the crowd and focus on Main Street; after all, it could be your business that is affected most - you could win!