Stephanie Omersa - Community Affairs Analyst
Published July 1, 1999 | July 1999 issue
Two Ninth District organizations recently received awards for their outstanding work in the field of microenterprise development.
The Montana MicroBusiness Finance Program, Helena, Mont., and the Northeast Entrepreneur Fund, Inc. of Virginia, Minn., received the Presidential Award for Excellence in Microenterprise Development at a White House ceremony in February.
The awards seek to promote sound lending practices and bring wider public attention to the successes and importance of microenterprise development, especially in enhancing economic opportunities among women, low-income people and minorities who have historically lacked access to traditional sources of credit.
Entrepreneur Carol Willoughby (left) and Mary Mathews of the Northeast Entrepreneur Fund accept the Presidential Award for Excellence in Microenterprise Development from President Clinton at a White House ceremony.
The Montana MicroBusiness Finance Program (MBFP) is a statewide government financial intermediary that builds the capacity of local organizations to promote community asset building and microbusiness ownership.
The Presidential Award given to MBFP recognizes its development of an innovative and effective program to facilitate microentrepreneurship through provision of comprehensive services, formation of creative partnerships, implementation of a performance measurement system, and adaptation of services to meet local needs.
MBFP operates as part of the Montana Department of Commerce and assists 12 microlending organizations across the state. These organizations provide loans, technical assistance, training and support to current and potential small business owners. Since the creation of MBFP in 1991, the 12 microlenders have made 574 loans to microentrepreneurs totaling $8.4 million.
Robyn Hampton, administrative officer for MBFP, is responsible for working with participating microlenders and evaluating the success of the program. According to Hampton, a microbusiness loan program makes sense in Montana. She notes that almost 95 percent of Montana companies are microbusinesses, which are defined as companies with less than 10 employees. With few large companies and many rural communities, creating self-employment opportunities is critical to the economic vitality of Montana families and communities.
The microlending organizations supported by MBFP have been successful but face ongoing resource challenges. With a strong entrepreneurial culture in Montana, demand for technical assistance and microbusiness financing is high. Finding staff and resources to meet that demand can be challenging. The microlending organizations work hard to attract and retain talented loan officers, who are critical to the success of microbusiness loan programs.
Funding is available from MBFP, but it is not grant money. MBFP funds, which provide six of every seven dollars in capital for the microlenders, are loaned at 2.5 percent interest. Principal repayment is deferred, but interest must be paid quarterly. There is no free lunch for these organizations; money must be raised from a variety of sources to cover loan write-offs and operating expenses.
Despite these challenges, success stories are common.
If you are in Lewistown, Mont., and have the urge to take part in an aerobics class, stop in at The Total Body Racquetball and Fitness Center. Business owners Kevin and Heidi Snyder received loans from District VI Human Resources and Development Council (HRDC), a microlender supported by MBFP, to purchase a building and expand their equipment and facilities.
"District VI HRDC provided us with the business counseling, training, and financing that we needed to launch and operate a successful business," Heidi Snyder said.
The Northeast Entrepreneur Fund, Inc. (NEF) serves unemployed, underemployed and low-income individuals in seven counties in northeastern Minnesota.
NEF received the Presidential Award for its strong commitment to developing and implementing impact measures to assess the performance of its programs, as well as for providing an effective and flexible model to deliver skill development services to rural entrepreneurs.
Since its creation in 1989, NEF has provided training or technical assistance to more than 2,800 customers and has helped start, expand or stabilize 399 businesses. With a local population base of 310,000 people, NEF has provided services to approximately 2 percent of the entire regional workforce.
The organization is noted for the development of its CORE FOUR Business Planning Course, a 12-hour, four-week course covering business operations, marketing, cash flow and success planning. In addition, NEF offers a variety of services, including one-on-one business counseling and workshops on selected business topics, to meet the needs of each customer.
Mary Mathews has been president of NEF since 1989 and has witnessed many changes in the region during her tenure.
Encouraging a local entrepreneurial culture has been one of the organization's greatest challenges, Mathews said. In the past, most people in the region expected to work for the large mining and timber companies that have been the core of the economy there for decades. Now that's beginning to change.
"It has been exciting to watch the interest in self-employment grow," Mathews said. "People now think of starting a business as one of their options."
NEF staff got a special surprise when Carol Willoughby, an NEF entrepreneur from Duluth, was invited to speak at the Presidential Awards ceremony and introduce President Clinton, who presented the honors at the event.
Willoughby started her business, Let the Whole World Know, in 1991 because she was afraid to ask anyone for a job in her field of graphic arts. With assistance from NEF, today she operates a successful, home-based specialty sign and banner company that serves customers in the Upper Midwest. She describes her business success as "a dream come true."
This article includes information provided by the Community Development Financial Institutions Fund, which administers the award program.
For more information on the Northeast Entrepreneur Fund, call (218) 749-4191 or visit www.entrepreneurfund.org. For more information on the Montana MicroBusiness Finance Program, call (406) 444-4325.
Other award recipients
In addition to the Montana MicroBusiness Finance Program and the Northeast Entrepreneur Fund, other Presidential Award recipients were: Corporation for Enterprise Development, Washington, DC and San Francisco, Calif.; Detroit Entrepreneurship Institute, Inc. of Detroit, Mich.; Institute for Social and Economic Development, Iowa City, Ia.; and Micro Industry Credit Rural Organization, a loan fund of the PPEP Microbusiness and Housing Development Corporation, Tucson, Ariz.