Opportunities for ethnic minority entrepreneurs Gerard Boekhoven 11 October 2005

2 Our challenge: improve market share in the urban region Ethnic minorities mainly in the larger cities Low market penetration in the larger cities

3 New entrepreneurship in The Netherlands Ethnic minority entrepreneurs = new entrepreneurship A few statistics: over 40% of the new entrepreneurs is located in the 4 major cities (Amsterdam/The Hague/Rotterdam/Utrecht) 15-20% of the companies in these cities is owned by new entrepreneurs new entrepreneurship concentrated by geography and sector room for improvement of success rate

4 Our approach is based on The strategic choice to develop an integral vision on urban themes Value creation is central theme Urban themes like: - Urban renewal: Emphasis on an integral development of the area/neighbourhood - Economic development in neighbourhoods and districts: Keeping neighbourhoods economically vital and stimulating economic activity

5 Our approach is based on (continued) - Reorganising industrial neighbourhoods Developing new concepts supported with financing - Healthcare / Elderly healthcare: Strong increase of demand, in which demand of the ethnic part of the population is increasing Financing and system of solidarity both under pressure - Education: Financing will get more and more a private character Developing alternative financing instruments in order to find solutions for these urban themes

6 Specific needs of these ethnic minority entrepreneurs Limited starting capital Limited collateral Flexibility of repayment schedule Profile of microstarters is perceived as risky due to lack of track record Lack of knowledge and information about financing possibilities

7 Set-up of microfinancing funds Goal is to stimulate (ethnic) entrepreneurship Instrument is used as a result of our integral vision of the area to fulfil a specific need of small starting (mostly ethnical) entrepreneurs - area vision shows the financial strength of the neighbourhood - translation to desired entrepreneurship in the area Arrange supportive policy together with the government (accommodation / permits to establish business etc.) Set up of microfinancing funds together with local government (securing the economic development of neighbourhoods and areas)

8 Structure of microfinancing funds Original principles of microcredit - trust - pride - independence Social security in stead of financial collateral - entrepreneur connects its neighbourhood with its enterprise Review based on different principles - financing register / stimulation of variety of business propositions Support in order to increase success rate - coaching in order to come to a business plan - training and workshops - mentoring - providing access to network of entrepreneurs

9 Conclusions Vision on economic development in neighbourhoods, support and mentoring - reduces the probability of failure of new entrepreneurs - reduces usage of social services - creates employment - AND strengthens the economic value of neighbourhoods Development of economic value is connected with the development of the socio social value It is essential for local governments to develop an integral vision on urban themes like entrepreneurship, healthcare, elderly healthcare and education