Microloan fund grows local business

Non-profit supports local entrepreneurs through loans under $10,000 with an annual interest rate of 10%

Though Charlane Simpson, 62, considers herself an artist before a businessperson, she’s managed to make a full-time job of the “entertaining aprons” she designs.

Simpson’s one-woman business, I’m Sew Excited, designs ornate, custom aprons for flower shops, cafes, wineries, and other businesses. Simpson got her start last year, with help from Victoria’s Community Microlending.

The non-profit supports local entrepreneurs through “microloans,” one- to five-year loans under $10,000 with an annual interest rate of 10 per cent.

Many of the borrowers, like Simpson, have little or no business experience, while others may have bad credit or a criminal record — factors a bank or credit union would consider high-risk.

“I needed money just to get started, to get fabric, brochures and cards, and I couldn’t have done it without them,” Simpson said. “I’ve been on social assistance since I was diagnosed with cancer (three years ago,) and now I’m finally working out of it.”

The loans are considered peer-to-peer, as a majority of the funds are provided in small amounts by individual investors from the community. Though donors take on the risk of a project going under, said Vu Ndlovu, executive director, Community Microlending uses “business mentors” to provide entrepreneurs with guidance. Simpson, for example, had little luck with selling aprons individually and was advised to find a niche in selling custom aprons to businesses.

“So far everyone has been able to keep up with payments,” Ndlovu said, “but when they start falling behind we work closer to help them get back on track.”

Community Microlending recently added an extra $10,000 to their coffers after partnering with the Victoria Microlending Association. The group had been supporting startups across the globe with KIVA.org, before learning that there was a need for micro investors in Victoria.

“With that extra money we can feed loans quicker, entrepreneurs can get started quicker,” Ndlovu said. “(Local business) is really key to community development, the local economy really is dependent on these businesses.”

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