Janie Barrera_Innovative Practices for Industrialized Nations

Janie Barrera_Innovative Practices for Industrialized Nations

• 2.
  THE UNBANKING CRISIS Nearly 30 million people in the U.S. have limited or no access to checking or savings accounts, or use non-bank financial services.  An estimated 7.7 percent of U.S. households, approximately 9 million, are unbanked.  18 percent of U.S. households, roughly 21 million, are underbanked.  Source: http://www.fdic.gov/householdsurvey/ 2
• 3.
  UNBANKED AND UNDERBANKEDIN THE U.S. • An estimated 21.7 % of black households are unbanked; 31.5% are underbanked • 15.6 % of American Indian/Alaskans are unbanked; 29 % are • 19.3 % of Hispanic underbanked households are more likely to be unbanked; 24 % are underbanked Source: http://www.fdic.gov/householdsurvey/ 3
• 4.
  A SOLUTION: MICROFINANCEIN THE U.S. • ACCION Texas lends to over 1,000 small businesses every year • We make loans to a wide spectrum of entrepreneurs, from those with no credit to those with excellent credit but who still are turned away by banks • Loans range from $500 to $250,000 • Average loan is just over $11,000 4
• 5.
  ACHIEVING SCALE: HOWACCION IS GETTING THERE • MMS – an innovative loan origination platform that speeds up the lending process • Applications receive an automated preliminary review; a key feature is a statistical analysis of 16 years of borrower repayment data • Microsoft CRM software tailored to microfinance that is paperless • Since 2008, ACCION Texas Inc. has sold MMS to other microlenders; 15 U.S. organizations now use the platform to increase their microlending capacity • High tech and high touch: We continue to work extensively with each borrower to understand their story 5
• 6.
  EXTENDING OUR ACCESSTO CREDIT • Automated assessment tool that will enable us to extend loans to those who fall outside our current guidelines due to credit or capacity. • Tool will gauge the applicant’s entrepreneurial aptitude and ethics to repay the loan • Loan size will be capped at $5,000 • New methods of loan disbursement and repayment will be developed to assist those with limited or no access to checking/savings accounts 6
• 7.
  THE GOAL: SELF-SUFFICIENCY •Challenge: To reach sustainability • Obstacles: 1. Target market is not as concentrated as in developing countries 2. Limits to what we can charge on our loans 3. Higher wages • In the next 5 years, self-sufficiency can be achieved by: 1. Increasing speed at which we make loans 2. Increasing number of loans made per lending employee 3. Diversifying products to include more revenue-producing high dollar loans, as well as efficient small dollar loans 7