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The Biggest- Impact Financial Sector You’ve Never Heard Of 83
start or grow businesses ranging from tortilla making to medical
supplies. While international microfi nance agencies have been criticized
for exceedingly high interest rates, Accion charges an average
12.5 percent.
Credit scores are of limited value in this market segment.
“FICO comes into play and collateral comes into play, but what
we really go after is trying to understand fi rst, how much experience
the borrower has in the business, how long have they
been at the business,” explains Cristian Sandoval, vice president
for external affairs and marketing at Accion in San Antonio.
“Then we can make an assessment of whether you have the passion,
the character, whether your business is going to be successful,
and then we can give you the money and support you.”
Many entrepreneurs return for additional loans as their business
grows.
Accion views microbusiness lending as the most effective way
to help people become more self- suffi cient. “We not only want to
teach them how to fi sh, we want to help them buy the pond,” says
Sandoval. “That way they can go out there and start creating more
jobs for other people, bringing opportunities for their kids, and
build a stronger community.”
Like other community development loan funds, Accion
meticulously tracks the impact its loans have on borrowers and
their communities. And it is considerable. From 1994 through
2009, Accion Texas-Louisiana’s $93.6 million in loans have created
almost 2,200 jobs and preserved another 4,000. They have
also generated an additional $55 million in payroll spending, or
60 cents for every dollar lent. These loans have transformed many
lives for the better. Often, borrowers come to Accion with no bank
relationships and poor or nonexistent credit histories. An Accion
loan allows them to build up their credit scores and become
“bankable.” Accion clients, on average, have increased their business
equity by 22 percent and their business profi ts by 67 percent
after three small loans. As borrowers are able to raise their standard
of living, their children tend to remain in school, graduating
from high school and even going on to college.