Final Repor t fo r. Hispanics i n Microenterpris e

Transcription

1 Southern Ne w Hampshire Universit y Graduate School of Business Community Economi c Developmen t Project i n CED Presented by Sara Varela Project Advisor: Jolan Rivera Final Repor t fo r Hispanics i n Microenterpris e Implemented in Manchester and Nashu a NH, September t o April 200 3

2 Table of Content A. Abstract 2 B. Summary 3 C. Definitio n o f the Proble m 4 D. The Goal of the Projec t 8 E. Methods 1 0 F. Results 1 3 G. Conclusions 1 7 H Bibliograph y 2 1 I. Attachments 2 2

3 A. Abstrac t Hispanics i n Microenterprise is a Community Economic Development project tha t attempts t o design and pilot a microenterprise progra m addressing the needs of th e Hispanic population i n southern New Hampshire, under the umbrella of MicroCredit NH. The Hispanic population ha s grown a t a rate of 81% in the las t 1 0 years and continues to grow exponentially, There is no business development program that focuses on thi s population. The long term objectiv e o f this projec t i s to stimulate the participatio n o f Hispanics i n economic development activities that help them increas e their househol d income. 2

4 B Summar y This project works with the Hispani c community o f southern New Hampshire, more specifically with Hispanics living i n the areas in and around greater Manchester, and greater Nashua. The Hispanic population ha s grown a t an incredible rate i n the las t 1 0 years, and there i s no economic development progra m that specifically addresses the needs of this population i n this field. This project attempt s t o design and implement a pilot progra m for microenterprise development among the Hispani c community. As the project i s finished we expect to have identified th e needs that this populatio n ha s regarding business development, and design and implement a pilot progra m that addressees these needs, to assist the community i n developing and understanding ho w microenterpirses are developed in this society. If the projec t i s successful we will hav e run microenterprise class that address some of the needs identified b y the community, we will hav e created a support system that encourages the entrepreneurs t o inquir e about their doubts and offer feedback to one another. Currently the two pilo t courses have been finished and two mor e courses are underway. The courses have been an excellent learning experience for those participants takin g the course, as well as for the organization offering th e course ( MicroCredit NH). However, the amount of people participating pe r course had been anticipated t o b e greater than i t has actually been. We have also had difficulties engagin g with the existing Hispanic business owners i n forming an d advisory grou p to support this effort. As recommendatio n for other taking on a project suc h as this one, it would b e wise to understand and recognize the time limitation s that existing business owners have, use them mor e as counselors and advisor from their own businesses, instead of trying t o engaged them i n a group setting. Also, recognize that this i s a very divers populatio n and that people have various background, religions believes, and political status. 3

5 Hispanics as a whole i s the sum a many diverse groups that share a common language, but have a great variety of needs. C. Definition of the Proble m Community Profile The Hispanic population i n the Unite d States is increasing at accelerated percentages. Today this group i s almost considered the larges t minority grou p i n the country. America can n o longer see itself as a country o f blacks and whites as the two mayo r demographics groups playing the field. Hispanics have to b e taken int o consideration because of the increas e in numbers i n the recen t years. This increase in numbers wil l only continue to grow as more Hispanics settle their way through th e immigratio n system, and as more second and third generation Hispanic s weave themselves into the American fiber. Because of the impac t the Hispani c population will have i n the economic and political arenas of this country i t is important t o recognized the needs and barrier s that this populatio n faces. Each state should assess the state of the Hispanics population and develop community economic development initiative s t o ensure that the potential o f this populatio n i s not los t because of the many challenges they face. In New Hampshire the number of people who consider themselves Hispanics has more than doubled when comparing the number s of the and 2000 census. There are several organizations that have recognized this change in the demographic map of th e state and have started outreaching and engaging with the emerging Hispanic populations. However, most of these organizations deal with human services issues, child care, and health. There is no institution currentl y assessin g and addressing the needs of this population s i n regards to microenterprise development. Because of th e many barriers Hispanic face such as, lack of an adequate English proficiency level to obtain the types of jobs i n accordance with their knowledg e and skills, because of th e desire to obtain a better standar d of living than that from which they ha d i n their hom e countries, and because of the innat e entrepreneurial spiri t that this populatio n ha s 4

6 demonstrated bot h i n Latinamerica and i n the Unite d States, it is important tha t there b e a communit y economic development initiativ e t o hel p highlight th e rol e of Hispanic microenterprises i n the state of New Hampshire. This project attempt s t o do such thing. Through listening and recording feedback, as well as engaging the Hispani c community in designing a program that would suite their microenterpris e needs we expect to hav e more Hispanics inquiring abou t microenterprise and developing these ventures to hel p themselves improve their standard of living. The project als o seeks to matc h the needs of the Hispani c community with the resource s available through th e MicroCredit NH program, which i s part of the New Hampshire Community Loan Fund. Population: I n Spring of 2002, 20,48 9 New Hampshire residents identified themselves as Hispanics in the census. This is an 81% increase from were only 11,33 3 did so. However, this only represents 1.7 % o f the states population. Nashua has the mos t Hispanics: 5,388, followed b y Manchester with 4,944 and Concord with 591. The tw o largest cities i n the stat e of NH are Manchester with a total of 107,00 6 residents, and Nashua with 86,605. The diversity inde x i n NH has grown; Based on this inde x Nashua is the mos t diverse city of the state followed b y Manchester. The Census figures show that, in both, Nashua and Manchester, the Hispani c population i s the larges t minorit y group. In regards to location as seen above, most of the Hispani c population i s located i n Nashua and Manchester. The Hispanic population i s mostly low income, many do no t have a good English Proficiency level that would b e needed for them t o go after goo d job opportunities ; so self-employment i s looked upon as one of the bette r alternative s t o them. Another challenge is the amount o f the Hispanic population that, unfortunately, are considered illegal resident aliens. Exact numbers i n regards to illega l immigrant s can only be guessed, however, by working i n the field directly with the community th e reality of the illega l immigrants amon g Hispanic in this stat e i s undeniable. During th e project researc h contact with many Hispanics that have this status has been evident. 5

7 In the las t census update repor t ove r 37 millio n peopl e i n the USA considered themselves Hispanics. The Hispanic community a t a national leve l is becoming mor e and more visual i n numbers. However, Hispanics are not an homogeneous group. Hispanics are from man y different countries, religions and ethnic and cultura l backgrounds. This diversity mus t b e kept i n mind when usin g the term t o categorize th e population. I t i s an unrealistic way of grouping a huge group o f people who shar e th e same language. The heritage, the history, the traditions an d customs vary greatl y depending on which countr y Hispanic s come from. So the assumption that Hispanics are a group that share the same characteristics can be debated, however, for practica l reasons in this projec t i t will b e assumed this i s the delineating factor when definin g th e community : Hispanic s living i n Southern Ne w Hampshire with a desire of starting o r succeeding in their business ventures. There are several local organizations that target specifi c entertainment event s within th e Hispanics such as the Mexican American Association of New Hampshire, The Association of Dominicans, the Brazilia n Association etc. Current conditions The research and the direct experienc e in the field u p to date has not shown othe r programs working o n similar issues regarding the Hispani c population i n the stat e o f New Hampshire. There are many other huma n service programs that focus on othe r aspects bu t no n offer acces s to loans, technical assistance and networkin g opportunities t o encourage entrepreneurialship amon g Hispanics. There i s a great nee d for these types of program s amon g the Hispani c community o f New Hampshire. The other program s assistin g in the areas of self sufficiency such as Family Self Sufficiency Program sponsored by the Ne w Hampshire Housing Finance Authority an d 6

8 it offers assistance to their tenants, however they do no t focus on the Hispanic population. Problem Statement Out of the almost 20,000 Hispanics living i n New Hampshire the majorit y o f them ar e located i n the Cities of Manchester and Nashua. A preliminary survey (See appendix A) shows tha t the majorit y o f Hispanics interviewed hav e a desire to star t a microbusiness but nee d guidance on how to start, and where to get the information. The survey also reflected that most of the interviewe d wanted t o create equity as opposed to gettin g loans. They also said that the bes t way to reac h them i s through thei r church, or word o f mouth. None of the business development organizations are currently doin g outreac h into churches to service the Hispani c community. Through the direct interactio n with the community and the gathering o f data, it appears that many Hispanics are not aware of the current service s being offered i n Manchester and Nashua for business development; and, if they kno w about this, they cannot acces s the services because of many barriers such as language, lack of empowerment t o inquire about the services, and lack of transportation. If there i s no economic development stimulus i n the Hispanic community, they will b e less likely to benefi t from th e mainstream American economy, which i s one of th e strongest i n the world. Many Hispanic in New Hampshire lack the informatio n o f existin g programs that could serve their existing needs, they are also challenged by the language barrier, which makes it much more difficult for Hispanics to find ou t about th e current services available to them. This project trie s to address these issues and t o increase the awareness of certain services, that could have a positive impact i f the Hispanic community were able to access those services and utilize them for thei r household benefit. 7

9 D. The Goa l o f th e Projec t Project Goa l The main goal of this projec t i s to encourage mor e Hispanic s to participat e i n economic development initiative s t o hel p themselves increas e their earne d income, and t o encourage feedback from this populatio n t o mol d the curren t MicroCredi t progra m t o better serv e their needs. Results on the researc h i n this field reflect, fo r example, The Aspen Institute in it s FIEL D (Microenterpise Fun d for Innovations, Effectiveness, Learning and Dissemination ) program. A repor t done to 13 8 entrepreneurs whos e househol d income s were belo w 150% of the nationa l povert y lin e a t the star t of a five-year stud y perio d that began i n 1991 states : 72 % experienced gains i n household incom e over five years. Average change was $8,484 (risin g fro m an average of $13,889 t o $22,374). 53 % moved ove r the povert y line, and the microbusines s was a major sourc e o f earnings for many. Th e survival rat e fo r microbusines s was 49% after five-years comparabl e wit h survival rate s for businesse s with similar characteristics. Fo r those whose businesse s stayed open, chances of getting our or poverty wer e greater tha n fo r those whose businesses closed. This study allow s u s to distillates tha t our projec t ca n be a useful povert y alleviatio n tool. The mission of the FIEL D progra m i s to identify, develo p and disseminate bes t practice s about microenterpris e a s an anti-poverty intervention. The Hispani c microenterprise secto r i n the souther n Ne w Hampshire economy o n a long term basis will be highlighte d an d recognize d as a vital par t of the overal l economy. Many Hispanics in New Hampshire are lef t out o f the economi c mainstream! Th e creation o f a microenterprise projec t tha t can fulfill the need s of this communit y i n thi s 8

10 regard would hel p create, as have done many other microenterprise projects, mor e jobs, build assets and enhance individual skills, which i n turn generate ne w economic activity that increase their privat e incom e and help reduce dependence o public assistance. The Hispanic business community wil l have a networking vehicl e by which to enhance their own businesses. More Hispanics will hav e had the opportunity t o lear n about self employment and microenterprise development i n the southern New Hampshire economy. I n a report prepare d for the Internationa l Labo r Organization "The role o f microenterprise development i n the Unite s States" it is clearly stated that these types o f program "emphasize building the economy of a community (o r an affinity group) " This publication also states that 23% of US microenterprise development program s reported that community economic development was their mai n goal. A total of two busines s skill courses will have been available in a bilingual setting for 1 0 to 20 Hispanic participants t o engage or explore microenterprise as an economic motor for their household. And 4 to 5 Hispanic entrepreneurs will b e involve d with existing business support groups to receiv e assistance and guidance in their microenterpris e ventures. 9

11 E. Methods Objectives The main focus of this projec t i s to understand which busines s development services better fi t th e Hispani c community, t o design these services, and do the appropriat e outreach. As stated on the Association for Enterpris e Opportunity Web page: "microenterprise I S a viable solution for some individuals and has proven itsel f as an effective strateg y fo r achieving significant gain s i n the income s and assets of man y people left out o f the economic mainstream." 1. Objectiv e! : To have a better understandin g o n ho w to assist Hispanics in Manchester and Nashua, NH i n their desires of developing microenterprises. This is done b y collecting an d processing information. A t least 50 surveys should be collected, this happen s at event s where the Hispanic s have a great presence, such as the Hispani c Festival in Manchester, of the Nashu a Neighborhood fair i n Nashua. By collecting this we expect t o mold the MicroCredit N H program an d bette r serv e the need s of the Hispanic s in southern Ne w Hampshire. 2. Objectiv e 2 : To have a support syste m i n place to refe r Hispanics among organizations servicing thi s community. A continuous relatio n with churches and other organizations that have already gained the trust of the Hispani c community need s has been maintained, t o develop trust among MicroCredit NH and the Hispani c population. At least 10 0 entrie s into a database should be done documenting contac t informatio n fo r othe r organizations, community organizer s and Hispanic in general. By creating this lis t we can assure that information i s disseminated via mail when there ar e events happenin g to the Hispani c community. Th e gathering o f information i s done b y attendin g 10

12 networking events, community events, and asking for people's contact informatio n fo r the mailin g database. 3. Objectiv e 3: To ru n two pilo t courses regarding entrepreneurial skill s which include budgeting, financials, marketing etc. These classes are to b e held i n Spanish with basic business terms highlighte d i n English and inpu t from participant s should dictated the tone an d methodology for future classes. Participatio n in these pilot courses is expected to b e between 5 to 1 0 participant s pe r course. As well as to assure that participants o f th e course know about the savings incentive programs, and the Trickle up programs to hel p them buil d equity i n their business. 4. Objectiv e 4: To increase the numbe r of Hispanics inquiring abou t business development programs, for example: MicroCredit. By April 2003 the project s seeks to increase the awareness of the program among Hispanics in NH. Currently we hav e had only 50 Hispanics attend informational meetings. The aim would b e to have that number double b y the above date. If 50% of participants o f the two pilo t courses continue to be engaged with MicroCredit NH after the course finished, (by having an IDA account, or by being par t of a loan group, or by participating i n other workshops and seminar, the goal of engaging Hispanics will b e accomplished. Background MicroCredit NH has been working with the microenterpris e business of New Hampshire since The emerging Hispanic population i s increasing enormously i n the southern par t of the state, to b e responsive to the needs of the community w e started working and designing a program that would bette r serve this subgroup of th e community. 11

13 Currently there ar e Fleet and PSNH financially supportin g th e Hispani c Initiative. The New Hampshire Community Loa n Fund is also a major participan t du e to the fac t that MicroCredit-NH is a program o f the Loan Fund. 12

14 F. Result s The result s and the impac t o f a business development progra m canno t b e seen shor t term. I t i s very importan t t o kee p this i n mind to kee p optimistic, focused and no t feel discouraged when one cannot see results on a short term basis. Results for Objectiv e 1 Surveys were passe d and informatio n collecte d to understand that most of th e Hispanics responding to the survey are interested i n acquiring mor e technica l assistance, and the ho w to's of starting a business in this society. Therefore, the projec t focused mor e on the technical assistance aspect through classe s and feedback on th e classes. As a result o f these surveys we created a pilot course to focus on what th e communit y wanted. After the pilo t courses were finished we also passed evaluations surveys to th e Hispanics i n Manchester and Nashua that have taken the pilo t course. As a sounding board for inpu t i n designing the program, and helping with the outreach we ha d also suggested the formation o f an advisory board. This board would b e formed b y people i n the community, suc h as Hispanic business owners, other busines s development organizations, and funders. There were attempt s o f forming a n advisory board confirmed o f Hispanic business owners, representatives fro m othe r microenterpris e organizations, and funders. However, these meetings wil l hav e to b e reassessed. The projec t di d work wit h some sort o f community o f existing businesses to pos t flyers and get the word ou t abou t th e courses, However, the existin g Hispani c business community shoul d be engage i n a different wa y rathe r than as an advisory board. 13

15 Objective 1 has been achieved in its first part. The information take n ou t o f the surve y prompted th e projec t t o focus on the technical assistance (course and workshops) an d to consider the access to loans as a second priority at this point. The objectives that have been partially achieve d are objective 1 under it s secon d effort to form an d advisory board. There were three attempt s mad e to engage existin g Hispanic business owners int o this meeting. The attendance o f the busines s owners was very limited, and they were the mai n focus of the board. So, this mus t b e reassessed to see how to bette r engag e with the existin g Hispani c business owners. The formation o f a business support grou p for Hispani c entrepreneurs wa s no t formed, and migh t no t b e formed. The feedback and information fro m th e communit y ha s been that i t would b e better t o offer course s and integrate d thos e intereste d int o existin g business support groups. After obtaining thi s information, th e projec t focuse s on providing th e courses and several participants hav e already enrolled i n the saving s programs. Others are i n the proces s of filling ou t the application. 14

16 Results fo r Objectiv e 2 The resul t of this objective was to establish constant relations and form a networ k system of referrals for services among organizations working with Hispanics. A database has been created with over 15 0 entries of contact informatio n o f Hispanics as well as organizations that serve the Hispani c community. MicroCredit--NH has been part o f several e-mai l lis t serves. These list correspond to networking event s that are held i n various locations and focus on disseminating information abou t the Hispanic community. A MicroCredit NH representative ha s constantly attended these networking events, and the informatio n ha s started to flow i n a bette r manner. Objective 2 has also been achieved, however, there needs to continue t o be work i n maintaining and creating relationships to assure that the informatio n flow s easily. The communication flow o f information regardin g the Hispani c community ha s improve d somewhat. There is still much to b e done i n this areas, but there are better relation s with the existing Hispanic business owners and the organizations. Results fo r Objectiv e 3 The two pilo t courses were offered i n Manchester and Nashua durin g the end of year The participation i n each course was an average of 5 participants pe r course. The courses were scheduled in such a manner that i t would allow for people to take either a morning class or an evening class. After the two pilo t courses were finished, a second round was started with feedback from participants. The formation o f a support group fo r people who want t o start busines s (loan group) i s no t as essential to the project. Th e project focuse s more on the technical assistance aspect of i t and on helping th e participants understan d bette r the ID A program. However, encouragement i s mad e to participants to engage and participate with existing business loan groups i n their areas. 15

17 In the future, we would want t o see the possibilit y of offering on e on one counseling, The projec t ha s focused it s energies in creating a community o f entrepreneurs who ar e learning about startin g microbusinesse s in New Hampshire. The community o f participants attendin g th e classes has bee n considered the mai n focus of the project, and the projec t ha s been successful becaus e participants feel they hav e learned something from th e courses. In fact, several of the participant s that took the pilo t program, are enrolled i n the second round of courses which has also started successfully. Objective 3 has been fully achieved: The two pilo t business skills course have been run. Input has been taken int o consideration when designing the second round of courses. Results for Objectiv e 4 The total number of participants inquirin g abou t MicroCredit NH up to Marc h of has risen to about 100, which does reflect double the numbe r when we started th e project. Ou t of this number, about 50% have engaged in the progra m i n the pas t tw o years. Objective 4 has been achieved: The database has been started, this will b e a work i n progress constantly updating i t and inputting ne w information. Currentl y there ar e over 190 entries i n the database for Hispanics and organizations dealing with Hispanics. 16

18 G Conclusion s The CEDnes s of the projec t My project i s a community projec t becaus e it takes the inpu t from the community t o mold and design the project. I t actively seeks participatio n fro m the community an d involves the Hispani c entrepreneurs community i n the process of designing the way th e project ha s been formed. It is economic because it tries to encourage economic initiatives for this communit y through sel f employment. B y increasing the incom e Hispanics receive from sel f employment, they are increasing their overall household income. And finally i t is development because through th e economic improvements o f these targeted communitie s there will b e development i n the areas of economy, social capital and entreprenuership. In working with the Hispani c community o f southern New Hampshire we hav e bette r understood their needs and challenges. There is much to b e learned and many mor e services to b e offered t o have a thriving economicall y developed Hispanic community. Most of the immigrant s hav e left their countries to find a better lif e for themselves and their children. And the majorit y ar e looking for a better economic standard than that they had. It has been a great experience to understand and develop a program that could hel p the Hispani c community reac h their dream of improved economic situation. The projec t goal to understand the community bette r ha s been achieved to a good degree. The other goals have been redefined and improved to make them mor e specific and manageable i n the context o f this project. Initiall y we ha d thought o f working bot h with immigrants an d Hispanic youth. These two othe r groups each represented a differen t outline o f needs so we decide to go with only Hispanic entrepreneurs 17

19 If the participatio n o f the Hispani c business owners had been more supportive an d engaged, we would hav e had an advisory board as we originally envisioned it. However, efforts i n this area will continue to occur. If the Hispani c leadership in southern Ne w Hampshire were no t as divided as i t is, it would hav e been easier to do the outreach, and to engaged the community i n general. But as stated i n the introduction, the Hispani c community i s not homogeneous and different nationalities, religions and political affiliations divid e Hispanics in New Hampshire as in the res t of the country. As state d i n Replicating Microfinance in the Unite d States th e microenterpris e development field has grown very recently and there i s still much to b e learned and much to experience in this field i n the Unite d States. The standards and measuring tools have no t been developed until recently, and because of this, i t is not until recently that many microenterprise program s are starting t o "talk the same language" assuring the same categories. So there i s a conscious effort to standardize the field and increase its awareness on a national level. The Association for Enterprise Opportunities, The Aspen Institute and many others are working har d to collect important data from the field to see the impac t of microenterprise program s on a bigger scale. Many organizations are talking about economies of scales, as a way to diminish cost and generate bigge r impacts on the society we are trying to help. However, economies of scales may be a good alternative for states where there i s a considerable number of low income peopl e trying to access microenterpris e venture s as a way to get out o f poverty, bu t i n new Hampshire, the number of people we have in the stat e i s very limited, and the numbe r of low income people trying microenterpris e ventures i s even smaller. So for the New Hampshire reality, we cannot think of economies of scales, at least at this stage. For example, MicroCredit NH works with around 300 entrepreneurs stat e wide, we cannot manage more than double this numbe r (600). So, we mus t kee p our focus when we think about our strategic planning. 18

20 In the case of the projec t specifically, the numbe r of Hispanics that may be interested i n a microenterpris e ventures i s also very limited, so this i s also important t o keep in mind. The projec t works with a very small number of people as the target audience, and fro m this numbe r a small percentage will actually be interested i n participating i n the classe s and workshops that are offer. The research also highlighted th e importanc e of the technical assistance aspect of our program as a very important aspect. As the resul t of the research, we believ e that i f we are able to keep the attendance rat e of the classe s a t a steady level, we will hav e accomplished an important par t of what the projec t i s about. We want t o make sure Hispanics have access to technical assistance, that they understand what i t takes to start a microenterprise and that they feel they can ask MicroCredit NH for assistance i f they are interested i n pursuing their busines s ventures. The access to capital is also important, however, we believe that the focus on onl y education and technical assistance is in itself a wonderful accomplishment. On the other hand, the reading s I n Bootstrap Capital by Lisa Servon have also provided a bette r understandin g of the different type s of loan products an d other services available for microentrepreneurs. The loan group system has its benefits and i s great fo r a certain type o f personality, however, b y limiting ou r program to only group loans, we miss out on the possibilit y of assisting other microentrepreneurs who ma y benefi t greatly from our program, but do not lik e the group concept to start. The existing businesses who nee d to increase a little help with their cash flow should be looked at closer. Loans up to $10,000 are wonderful, bu t there i s always room fo r improvement t o offer highe r level loans. Thi s was the feedback we received from th e advisory group. 19

21 Two things we would sugges t to someone doing a similar project i s to kee p i n mind that the result s and the impac t o f these types of projects i s long term, i t is important t o hav e a good supportive grou p o f people to bounc e ideas and remind u s of the importanc e o f perseverance and focus. When try t o engage as many people from th e constituency as possible, there ar e so many factors that have to b e considered, the business, the household, the family, transportation etc, that the consistency of the peopl e that will show up at meetings wil l vary greatly. The bigger the numbe r there i s to keep moving forward, th e bette r th e possibilities of having a considerable number o f people engaged i n the program. 20

22 Bibliography Carr, James H. and Tong, Zhong Yi "Replicating Microfinance i n the Unite d States", John Hopkins Universit y press, Else, Doyle, Servon and Messenger "The role of microenterprise developmen t the Unite s States" International Labor Organization, Washington D.C, March Field Forum newslette r issu e 9, September 2001, Washington, DC Servon, Lis a "Bootsta p Capital" Microenterprises an d the American Poor, Brooking s Institute Press, Washington DC