Mercy Corps Northwest

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Quick background

• Mercy Corps Northwest (est. 1998) is the regional economic development organization of Mercy Corps.

• Promotes self-sufficiency through microenterprise development and self-employment in Oregon and now Washington.

• Portland based loan program started in 2001 and expanded into WA state in 2009.

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Expansion to Washington

• Loan program already serving Clark County

• Research with Willamette U. group (need/fill service gaps).

• Opportunity to respond to economic conditions (broaden reach - online services).

• Strategic collaboration with WA CASH (leverage resources).

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Expansion to Washington …continued

• Change in WA self-employment rate from 2000-2007– 15 of 39 counties shrunk from -0.5% to -19.0% compared to the

national rate change of +20% (NWAF)

• Increase in size/scale reduces cost per client which allows us to assist more individuals. – $3,201in 2006 to $2,036 in 2008 (MicroTest)

• We’re getting better at providing successful loans – lower loan loss rates i.e. 14.4% in 2006 to 5% in 2008

(MicroTest)– lower PAR (loans >30 days past due) from 44% in 2006 to 16%

in 2009 (MicroTest)

• Organizations involved: WA CASH (joint participation), StartZone, WSU EED.

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Loan Program

• Serving low-income clients lacking access to capital throughout WA (mobile lending).• 74% of MCNW clients are below 100% (HHS) at intake

(MicroTest)

• Online application; Co-branding for partners; Leverage existing resources in the area (SBDC network).

• WA CASH, StartZone, and WSU EED.

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Loan Program (cont.)

• Loan capital and funding sources (federal, state, local, foundations, individuals).

• Partners and their resources are key to success (example: Grant County team - Latino pilot project).

• Understand our criteria; Inform intermediaries and entrepreneurs in your community; Contact me!

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MicroMentor

• Web-based service connecting entrepreneurs with skilled business volunteers (ASPEN creation).

• Increases access to industry-specific and technical expertise via mentoring.

• Expand client services or scale existing mentoring services.

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Progress

Loans:• Since 2001, 191 loans totaling $2 million, 6.6% default rate.• Since WA expansion, 8 loans totaling $54K (Trucking loan

example – Earned It, Working on Keeping It, Will Grow It!).

MicroMentor:• 2,030 entrepreneurs enrolled since 2006.• 1,560 mentors enrolled since 2006.

Overall:• 83% of all clients are operating a business 18 months after

receiving MCNW services (MicroTest).• The average increase in household income 18 months after

receiving MCNW services is $6,697 or 23% (MicroTest).

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Other Initiatives

• LIFE program (find partner to bring program to WA state).

• IDA program (AFIA funding, find match to bring into WA state).

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Final Thoughts

Consider this Loan Program and MicroMentor an option only if your community can get serious about investing in other ongoing business support resources on a local level, for example:

• educating your entrepreneurs as they prepare to go into business, and

• continuing support as they become established and grow their businesses.

www.mercycorpsnw.org/loans

www.micromentor.org

Anthony Gromko, WA Lending Manager

agromko@mercycorpsnw.org