Promoting Entrepreneurship in Houston through the Microfinance Program Kelli Lewis- Chairman of the Microfinance Initiative Presentation at the 2014 Lend for America Summit November 15, UC Berkeley, CA

Poverty is a problem in Texas, especially in Houston 17.9% of Texans live in poverty (4.56 million people) (2013) 49.8% of Texas households are One Crisis away from slipping into poverty (2014) 27.9% of Houstonians live in poverty (2009) 9% of Houstonians live on <$2/day Houston’s GDP totaled $442 Billion in It grew by 3.8 % in 2011, more than double the growth rate of the U.S. If Houston were an independent nation, it would rank as the world’s 30 th largest economy Yet……. Poverty in Houston is not a result of a weak economy. It is a result of other limiting factors such as insufficient education and impaired access to capital 2

Microfinance is the key to breaking the cycle of poverty Microfinance typically refers to microcredit, savings, insurance, money transfers, and other services (such as education) targeted at poor and low-income people The core product of microfinance is microcredit: small loans with a short payback period intended to help people start small businesses Microfinance is not a payday or title loan solution that charges usury rates but operates more like a traditional financial institution focusing on customer service 3

Objectives of the Bauer Microfinance Program Prepare entrepreneurs for microfinance loans by providing financial literacy and entrepreneurship education Grow local small and medium-sized enterprises by promoting the expansion of microfinance in the Houston community Establishment of a robust and innovative program for graduate level students that combines classroom research into global Microfinance models with direct application through the Bauer Microfinance Program 4

The focus of the program is making an impact in Houston Local Focus exclusively on Houston-area projects Education Inclusion of financial literacy education Formalization of entrepreneurship education Provide business plan consultation by Bauer College students Inclusion Collaborate with local microfinance organizations, local branches of international organizations, and businesses in the communities we serve 5

Structure of the Bauer Microfinance Program Frequency: 2 programs per year – Programs are concurrent with the Spring and Fall academic semesters Location: Rotates each program – Held in underserved areas – Space is provided as an in-kind donation by our program partners Duration: 12 weeks per Program Timing: Saturdays from 9am-1pm Participants: Between participants per program Achieving success requires the program to dive further into education 6

A fresh approach can tackle the root cause of poverty The mission for Microfinance is to combine entrepreneurship for participants and education opportunities to help break the poverty cycle in disadvantaged neighborhoods across Houston and the U.S. Linking children’s enrollment and success at school to a reduced interest rate for the parent Investing the difference between the regular payment rate and the discounted payment rate into a 529 savings account, Coverdell account or other savings mechanism for a child’s education expenses Designed to promote education which is the most important tool in breaking the cycle of poverty Microfinance institutions globally are seeing an increased demand for savings products (ex. Jipang KuSave in Kenya) Adding savings….. Yields a new approach to Microfinance in the U.S. Adjusting the original mission…..

Thank you for your time and your enthusiasm of the Microfinance Program at the University of Houston! Contact Us: Saleha B. Khumawala Ph.D., CPA Professor of Accounting Founder & Director, Nonprofit Management and Microfinance C.T. Bauer College of Business Voice Program Assistant: 8