Lisa Helps

Lisa Helps

WOMEN IN BUSINESS – Community Micro Lending offers history of success

Community Micro Lending Society makes small loans to aspiring small-scale local entrepreneurs who don’t qualify for traditional financing

In the early 1930s, with the Depression leading to unemployment for a quarter of Victorians, a housing crisis and a soaring cost of living, many small local businesses faced closure. In answer, a group of locals came together to create the Citizens’ Emergency Relief Fund.

The message was “that taking action was a more powerful response than waiting for the government’s stimulus package to trickle down,” and in July 1931 alone the fund raised more than $50,000.

Flash forward to today and the Community Micro Lending Society “is a 21st century citizens’ response to similar challenges.”

Now in its fourth year, Community Micro Lending makes small loans to aspiring small-scale local entrepreneurs who don’t qualify for traditional financing, explains Executive Director Lisa Helps. “Banks and credit unions lend money to people with bank credit. We’re here because sometimes people need a second and sometimes a third chance.”

Through these loans, and the mentoring and support opportunities that accompany them, the society aims “to build a vibrant local economy, reduce poverty, foster sustainable business and empower people.”

Ultimately the group aims to create a more vibrant local economy through meaningful self-employment that enriches the entrepreneurs, their families and their communities.

Not a grant, these are loans that have a specific term to be paid back, just like a traditional loan, with a low interest rate. The difference is that rather than the loan coming from a financial institution, it comes from people in the community who choose which entrepreneur they want to loan to.

“They’re small success stories, but they’re very important success stories in terms of weaving a stronger social fabric and making sure there’s a place for everybody in the business economy,” Helps says, noting how the local small business community has stepped forward to help, as board members, mentors and in providing the peer-to-peer loans.

Loan applicants are interviewed by the society’s Loan Committee and undergo both credit and criminal record checks. Approval is based on need and a good idea rather than experience, collateral or a complete business plan.

Once approved, entrepreneurs are profiled on the society’s website, to be reviewed by potential lenders, who can provide as little as $500 to a particular applicant, with the money pooled and disbursed to the entrepreneur once the full loan amount is raised. While the entrepreneurs don’t know who their lenders are, they “know there are people in the community who believe in them,” Helps says.

Through the process, entrepreneurs receive financial literacy training and with mentors, receive help developing and implementing a business plan. The mentors are a cornerstone of the program’s success.

“People need credit but they also need mentorship, so once a person’s loan is approved, we match them with a mentor in the community,” Helps explains, welcoming people with business knowledge, skills, motivational capacity and passion for the community to step forward.

“We look for people who want to be part of someone’s success and who are open to learning as much as mentoring,” Helps says, suggesting the actual time commitment sits at around five hours a month. “A mentor needs to be passionate about small business and the community and open to the idea that business and the community aren’t separate.

“We need each other to flourish and to live well, really.”

Making it all work is the nine-member board of directors, coming to the organization from across sectors, experiences and ideologies, and staff members Vu Ndlovu, director, entrepreneur support, and Kate Fleming, director, outreach and Launch! programming.

Because all of the loan money goes to the entrepreneurs, the society must find other ways to fund their low administration costs, which it has done through various community fundraisers and donations, in addition to program collaborations.

Awareness of Victoria’s community micro lending program is growing, both here and abroad, leading the society to look for ways to grow the concept. “Now there’s people calling from all over the place saying we want to do micro-lending the way you are,” Helps says. “People love hearing the stories about how small loans and a community of support have changed people’s lives. That’s what inspires people.”

The potential is significant, Helps predicts: “Small-scale entrepreneurism is the way of the future. There’s something about what we’re doing that people are really excited about being a part of.”

For more information, call the Community Micro Lending office at 250-590-4515 or visit online at www.communitymicrolending.ca

Time to launch your business

In addition to its micro-lending program, Community Micro Lending has also developed its Launch! programs for youth, women and Aboriginals.

Participants come together in a group setting for Launch!, which takes potential borrowers through the business plan and budget development process.

Building the idea of community partnerships, Launch! Youth, for people between the ages of 18 and 30, is delivered with the Community Social Planning Council, while Launch! Women is delivered with Bridges for Women, with some funding from the Canadian Women’s Foundation.

Launch! Aboriginal, though not yet a group program, is a micro-lending program created specifically for Aboriginal people in Greater Victoria who want to start small businesses, create self-employment opportunities, or improve employment skills. Participants will develop a budget and business plan and/or plans for self-employment or employment. When ready, they can present to the Loan Committee and once approved, can borrow from the Aboriginal Loan Fund created by Ralmax Group of Companies.

Coming up:

The Next Launch! Youth self-employment program will run April 2 to June 25 (Tuesdays from 6 to 8 p.m.)