[March 30th speaker event recap written by Julie Menezes; photos taken by Brian DiCola.]
Microfinance in Our Backyard: Serving the Unbanked Community in the Bay Area
The March 30th SVMN event took place at the Hanson Bridget law offices in San Francisco and featured guest speakers Rick Parras (CEO and Co-founder, Apoyo Financiero), Haydeé Moreno (Micro Branch Director and VP, Self Help), Caitlin McShane (Marketing and Engagement Manager, Opportunity Fund), Devin McAlpine (Business Advisor, Opportunity Fund), and Marie Leggette (Opportunity Fund borrower.) The panelists discussed their experiences with micro lending in the Bay Area, and shared their organizations’ missions, accomplishments and business models. All three organizations extend microcredit, or plan to extend microcredit, to un-banked and under-banked individuals in the Bay Area. Approximately 40 million US households, or 106 million people, are financially underserved. 22.9% of California’s population is un-banked or under-banked.
Rick gave an overview of Apoyo Financiero (AFI), an MFI serving the unbanked Hispanic community with fixed interest loans. AFI allows those who lack credit history to take out loans in order to invest in opportunities, meet their needs, improve their standard of living, enable self-sufficiency of family members, and build their credit history. AFI contributes to economic development in the home countries and towns of their customers, as well as in the Bay Area. Many borrowers use the loans in order to open small businesses in their home countries. Loans range from $3,000 to $10,000 and are paid over a period of 12-48 months. Founded in November of 2007, Apoyo Financiero has extended more than $5.4M in loans.
Haydeé (Self Help) discussed the goals and strategy of Self Help’s Micro-Branch pilot launch. The mission of the Micro-Branch is financial progression for the un-banked and under-banked, which Self-Help plans to achieve through the right product mix, prices, and a brand promise of community and affinity. Self-Help conducted a survey of their target market to aid in developing a business strategy. Each branch they open will be a one stop shop for banking transactions, accounts and loans.
Caitlin (Opportunity Fund) began by discussing some key differences between microlending in the US, and international microlending. In the US, technical assistance is more readily available, and interest rates are typically lower. There is a smaller concentration of borrowers, and there are more regulations. Opportunity Fund is California’s largest microlender financing Bay Area entrepreneurs, helping them to earn, save, and invest. In addition to access to capital, borrowers are also provided with one-on-one business advising. The organization’s small business microloans range from $1,000 to $100,000. Opportunity Fund clients have an 85% business survival rate, compared to a national average of 44% for similar businesses.
Devin McAlpine spoke about Opportunity Fund’s business advising process. He presented a case study and interviewed one of Opportunity Fund’s borrowers, Marie Leggette, successful owner of fashion boutique MarieDenee.com. Marie spoke about how Opportunity Fund assisted her and enabled her to expand her business. She discussed the loan process, and the assistance provided by Opportunity Fund after the loan was provided.
The event was hosted in partnership with Opportunity Fund, to support the upcoming Microfinance USA Conference. Learn more about the conference at www.MicrofinanceUSA2010.org.