(Community Matters) Dean Lisa Sevron conducts research and writes extensively on microenterprise development organizations (MDO), which are a type of community development finance institution (CDFI). PeopleFund isn’t a microfinance organization; most domestic microfinance orgs average $9k, with loans up to $30k. We *are* a microenterprise lender, however. We focus a bit higher on the food chain, average loans of $70kish, ranging up to $250k. Most of our borrower’s have some proven cash flow and some collateral, though not enough of either for tradtional bank financing. Nevertheless, our borrowers pay us back (95%+) and we generate over 70% of our operating budget from earned income.
Lisa talked about the Five Myths of MDOs:
- We’re done when we make the loan
- Microbusinesses grow up to be big businesses
- It’s all about credit
- US and lesser developed country microlending is the same
- Success = new business starts
Carol Thompson & Sylvia Stern (Silverton’s Andy White in the background)
Five Greatest Challenges:
- Fragmentation
- Insufficient data
- Lack of accreditation & regulation
- Narrow product lines
- Inconsistent & unreliable funding streams
PF staff along the wall: Margo Weisz (ED), Barbra Boeta, Eric Scott, Ayleen Perez, Brad White & Tanya Ladha
Lisa’s four recommendations:
- Restructure the field
- Innovate
- Standardize
- Accreditation & standards
Community Matters 