microfinance
helping hispanic businesss get a jump start

By Millie Acebal Rousseau

Entrepreneurs know how difficult the first few years in business can be. Unless you have a steady cash flow and are profitable, most banks won’t consider giving you a loan. That’s where ACCION Texas steps in. The non-profit provides business owners with microloans to help get started.
ACCION Texas recently hosted the Summit on Microfinance in the U.S. with Citi as the presenting sponsor. The event, attended by about 1,000 people, was held in San Antonio on November 6-7.
Keynote speaker Dr. Ben S. Bernanke, chairman of the U.S. Federal Reserve board of governors, noted that the microfinance movement is providing social benefits as well as economic opportunities. “Microentrepreneurs often involve their family members in their businesses, providing them valuable work experience; and extra income can confer important advantages on future generations, such as a chance for a better education,” he said.
Other guests included U. S. Treasurer Anna Escobedo Cabral; Michael L. Barrera, president and CEO, U.S. Hispanic Chamber of Commerce; Mark Pinsky, president and CEO, Opportunity Finance Network; and Meizhu Lui, executive director, United for a Fair Economy.
According to Janie Barrera, president and CEO of ACCION Texas, the organization has provided 8,000 loans worth $74 million since its start 14 years ago. Between 1994 and 2005, nearly $42 million was loaned. This in turn created close to 1,000 jobs and generated about $78 million in economic activity, including job earnings of about $25 million and local tax revenues of $4.5 million. The average loan is $14,000, but can range from $500 to $50,000. They have a 95 percent repayment rate; 55 percent of those they serve are existing businesses, while the other 45 percent are start-ups of one year or less.
Restaurants, salons, daycares, landscapers, truck and cab drivers, construction and consulting firms are some of the industries that rely on ACCION Texas. The program is open to everyone statewide, but minority- and women-owned businesses represent the majority of borrowers. Latinos make up 67 percent, and almost half of all loans are given to women.
“We create opportunities for people who would otherwise be left out,” says Jordana Barton, vice president for development and communications at ACCION Texas. “We provide the financial means and services to support the entrepreneurial spirit in this country.”
Small businesses that would otherwise be underserved by mainstream financial institutions particularly benefit. According to Bernanke, “Small businesses ... have always played a vital role in the U.S. economy. Together, they employ more than half of private-sector workers and produce more than half of private-sector output.”
Barton adds the economic benefits range from increased revenue to new jobs to financial stability—all of which impact future generations. “One of our strengths is we’re entrepreneurial; that passes on to the next generation,” she says. “Our goal is the intergenerational transfer of wealth.”
The organization acts as an alternative to predatory lending. Unlike competitors—payday lenders and pawn shops—ACCION Texas reports to credit bureaus, helping borrowers build a credit history and increasing their chances of securing lending in the future.
ACCION Texas has countless success stories. One woman who had cancer wanted to launch a home business, and a microloan helped her buy equipment. Now her two sons work with her. Another woman opened a health food store in a poor neighborhood in Houston and introduced healthy eating to low-income families.
One of the most inspiring stories might be that of Anthony Terrazas, chairman and CEO of TerraHealth, Inc., which provides medical staffing, consulting and IT support for healthcare delivery systems. After retiring, Terrazas decided to launch his own company in 2001. He started small, but the company grew faster than anticipated. “Banks wouldn’t touch us. We didn’t have a lot of assets [at the time], and were a services company,” he says.
ACCION Texas gave him a $10,000 loan. “The initial loan was small, but it was critical at a time we really needed it.” Today, TerraHealth employs 458 employees in 32 states. “When they help a company like us, they help America become stronger,” he says. This year the company closed out at $31 million, exponential growth from Terrazas’ first year, when he made $250,000.
“We help people get their dream by providing access to capital needed,” Barrera says. If you give a man a fish, he will eat for a day, but if you teach him how to fish, he will eat for a lifetime. “ACCION helps them [him/her] buy the pond.”

For More Information on the future business and Commerce missions call the USHCC at (202) 842-1212 or visit www.ushcc.com