Starting next month, refugees living in San Diego who aspire to own their own business can begin making the dream a reality through an innovative program organized by the International Rescue Committee.
The goal of the micro-enterprise program is to create viable businesses that contribute to the economic development of refugee populations and halt their dependence on welfare assistance, said Scott Carpenter, the program’s manager.
“This is not some social service program. This is a real hard-core business creation effort,” Carpenter said.
While there are plenty of refugees who have launched successful enterprises here, the idea is that with a little help in the form of some basic training and a micro-loan, more could be started, thus helping more people to lift themselves from poverty, Carpenter said.
Last year, the IRC, which has had an office in San Diego since 1975 and is based in New York, resettled about 700 refugees in the county and provided assistance to some 2,500 refugees. The largest groups are from Bosnia, Kosovo, Eritrea, Ethiopia, Somalia, Sudan, Russia, Iraq and Vietnam.
Since 1975, the organization helped settle some 17,500 people in the area.
The micro-enterprise program scheduled to begin in January is based on a similar loan program first started in Bangladesh in 1976, which has helped millions of poor people escape poverty, Carpenter said.
If the program is successful, the IRC may use it as a model for helping refugees located in other areas of the country, he said.
The 10-week training program involves two weekly sessions of about three hours each covering the basics of starting and operating a small business. Included in the training are marketing, time management, computer use, and other life skills.
The program should initially draw a few hundred participants, but that will likely be narrowed down to about 75 who will go through the actual training. From this pool, the program will select the best candidates to receive micro-loans to help get the business launched.
“We hope that in the first year we’ll get at least 12 viable small businesses. We’re more interested in quality than quantity,” Carpenter said.
Helping the IRC in the micro-loan portion of the program is Acci & #243;n, a locally based nonprofit that specializes in just this type of lending, and San Diego National Bank.
The former organization specializes in making micro-loans up to $25,000, while the bank will provide some $20,000 for the loan loss reserve account.
When the IRC came to the bank with the idea for the program, it contacted Acci & #243;n for its participation, said Gordon Boerner, San Diego National’s community reinvestment manager.
“We were one of the original sponsors for Acci & #243;n and we saw this program as one that fits within the bank’s community reinvestment philosophy,” Boerner said.
With the bank’s reserve commitment, the micro-enterprise program should be able to make some $75,000 in loans, with the maximum loan capped at $3,000.
Despite the low figure, borrowers have been able to do some amazing things with micro-business loans, said Susan Lamping, Acci & #243;n’s vice president of lending.
“You can do a lot with it,” she said. “We’ve had clients that used the funds to purchase computers, raw materials, working capital, and general overhead.”
Most of the borrowers will operate the businesses out of their homes, precluding large capital expenditures.
Several of Acci & #243;n’s clients have grown their businesses to the point where they have qualified for a commercial bank loan, she said.
Since its inception in December 1994, Acci & #243;n has made 840 loans for about $2.6 million. The default rate is about 5 percent, but this year hit 3 percent, Lamping said.
Helping the IRC keep track of who participates in the program and how much training is provided will be LearningFramework, a local software startup that is providing its services pro bono.
“We believe in what they’re doing,” said Evelyn Pratt, director of marketing.
The micro-enterprise program is being financed through a combination of a federal grant and local donations totaling $179,000. The federal Office of Refugee Resettlement is providing a grant of $151,000, while the remaining funds come from Las Patronas, a La Jolla philanthropic organization, and individual donors.
