San Antonio Express
By: David Hendricks
August 5, 2011
San Antonio-based Accion Texas Inc., the nation's largest nonprofit microlender, is expanding its small-business lending program into six more states.
A partnership announced Friday will expand the organization's lending reach to parts of Alabama, Illinois, Kentucky, Mississippi, Missouri and Tennessee. Accion recently added a program in Arkansas, after expanding to Louisiana in 2009.
In all, 252 counties and parishes in the eight-state federally designated Delta Regional Authority, including Arkansas and Louisiana, will be covered by a partnership between Accion and Southeast Missouri State University's Douglas C. Greene Center for Innovation and Entrepreneurship.The partnership, called Accion Delta, will provide microlending services from an initial office in Cape Girardeau, Mo., where the university is based, said Janie Barrera, Accion president and CEO. The Delta Regional Authority carries out job-creation and investment programs to improve the quality of life along the lower Mississippi River area.
Since 2006, the university's Greene Center has trained more than 750 people interested in starting their own businesses in a program called Operation JumpStart. Nearly 250 businesses have formed, with 90 percent still operating. The aim of the partnership is to add lending services to Operation JumpStart.
The Greene Center is working with the Delta Regional Authority to build a network of Operation JumpStart programs throughout the lower Mississippi River Delta region. Accion will help prepare trainers who will spread the technical assistance and lending programs to all Delta Regional Authority states.
The 252 counties and parishes in the Delta Regional Authority are categorized as economically distressed. U.S. Census figures indicate that population levels in many of the counties and parishes peaked before 1980. Most have per capita income levels at or below the national average. The poverty rate in the region is 55 percent higher than the national rate.
"Many people have lost agriculture and factory jobs," Barrera said.
Loans in the five states will be capped at $10,000 and will be limited to participants of the Greene Center's JumpStart program. "The participants won't have the collateral we usually require, but they will have skin in the game by going through the JumpStart program. We will honor that as part of their collateral," Barrera explained.
Accion will start with one loan officer based in Cape Girardeau, but Barrera said she expects to have a loan officer in each of the Delta Regional Authority states within 12 months. Lending will begin in about six weeks, she said.
In June, Accion said it had agreed to make loans below $50,000 to small businesses in one county and four cities in the eastern half of Arkansas, an area called the Arkansas Delta. The Arkansas program begins this fall.
In January, Chase bankers announced a $5 million gift to Accion for small-business loans. After that, Greene Center Executive Director James Stapleton requested Accion to become a lending partner.
Accion policy required three years of funding to be available to start a new market, Barrera said. But Accion board members approved a change to allow Accion to make a softer entrance into the new states.
Since its 1994 founding in San Antonio, Accion has made 12,000 loans totaling more than $112 million. Loans in most programs range from $500 to $100,000.
Accion is not anticipating further geographic expansion at this time, Barrera said.
"We have our hands full. We've been successful mostly in urban areas. With this endeavor, we're taking on a big challenge in rural areas," she said.