Microenterprise Finance

2 Context and History Strategies designed to create or expand small businesses that are unable to attract financing from commercial sources. Non-profit organizations have been est. to channel capital to these small businesses. ME finance received PR boost in early 1980’s from success of Grameen Bank (began lending in 1976)

3 Funding and Outcomes Funding for these non-profit orgs. providing ME finance comes primarily from foundations, govts. (local, state, federal), and often as income from operations (earned income). Three desired outcomes: 1. expand local economies in underserved or disadvantaged areas. 2. increase household income of borrowers. 3. create a base of entrepreneurs for future development

44 Quick background of MCNW Mercy Corps Northwest (est. 1998) is the regional economic development organization of Mercy Corps. Promotes self-sufficiency through microenterprise development and self-employment in Oregon and now Washington. Portland based loan program started in 2001 and expanded into WA state in 2009.

5 Washington services Access to capital (online loan application); combined w/ local partner providing business development support. Virtual mentor program No geographical restrictions; serving throughout WA

6 Being prepared for financing Have a business plan w/ 12 months of financial projections! List your exact project budget. Know what sources of capitalization you will need. Be prepared to talk the following: -personal finances, business experience, short/long term goals, a plan “B”.

7 Cont…. your personal credit. ( Look over the loan terms and write down questions! what types of registrations/licenses you will need. (

8 Help to all kinds of businesses (ex. retail, wholesale, manufacturing, agricultural, tourism, health care, home-based, virtual…)

What is MicroMentor? A free online service connecting entrepreneurs with business volunteers in mentoring relationships. Our mission is to help small businesses grow faster, generate more revenue, and employ more people.

10 Program Overview Entrepreneurs Enrolled Mentors Enrolled Mentoring Matches 58% Women Mentees 45% Ethnic Minorities 50% Low- and moderate-income

Stats i.Entrepreneurs saw an increase in revenue of $15,390 – representing a 75% increase in their income. ii.87% of existing businesses were still in operation a year after working with their mentors. The national average for business survival is 66%. iii.Over 50% of businesses that were in the pre-launch stage upon joining MicroMentor were able to open their businesses, while another 38% were still in the planning process. iv.On average, entrepreneurs worked with their mentors for an estimated 16 hours. 43% of interviewed mentees were still in contact with their mentors over a year after the match was made.

12 How It Works 1.An entrepreneur signs up and describes their business and their challenges 2.Mentors use our search tools to find targeted prospective matches, and send an offer to help 3.The entrepreneur accepts their best-fit offer and the match begins

Anthony Gromko