Community Partner Speaks About the Need for CGF’s Services in Providence
Wednesday, May 20, 2009
Tomás Alberto Ávila, Director of the Small Business Development Center at Johnson and Wales University in Providence, Rhode Island recently spoke about his interactions with the Capital Good Fund and the need for microlending that CGF proposes to fill. Below is a full, written testimonial from Tomás.
The Capital Good Fund: A Project with Transformational Potential
Tomás Alberto Ávila
May 15, 2009
I remember meeting with Andy Posner to talk about The Capital Good Fund idea as a microlender dedicated to serving the community of Providence, Rhode Island with a mission to tackle poverty through entrepreneurship, innovative financing and other unique loan products and services, as Brown University Student, I listened carefully and I must admit somewhat skeptic about what I was hearing and what I expected as an outcome.
During our meeting and several other meetings, I told Andy that I saw a difference with the project he was proposing in that its intent was to help the immigrant and less privilege communities of Rhode Island and not just another project to fulfill a thesis research requirement that leaves nothing but empty promises to the residents that volunteer their private situations and their community’s ills hopefuls that it would help improve their neighborhood and their personal situation, only to be forgotten after the particular student’s thesis has been completed, his or her grade attained and move on to the next semester and their next job while the residents situation remains the same and the community as well.
My comments to Andy were based on my experience with many Undergraduates and Graduate students from Brown University and other local colleges and universities through my years of involvement in empowering the less privilege community through, social political, business and economic development empowerment of such community and remaining involved in the community and watch the vicious cycle evolve over and over as students tackle their academic research project requirements with the less fortunate community community as their laboratory.
Such consistent use of the community as a self fulfilling laboratory and in many cases the creation of a “progressive” agenda by creating activist movement and organizations that are lead by the students themselves creating a leadership dependancy on their inexperience but resourceful economic superiority that provides them with access to the state power base through their Ivy League contacts, has created resentment among less privilege leaders and local elected officials as well as the political base of such communities towards the student community and the academic institutions that sponsor such projects and unfair socialy misguided intellectual asset that benefits the student body while leaving the community behind once concluded.
The Capital Good Fund Andy described to me, was a different approach that planned to provide loans to local entrepreneurs seeking capital for income-generating activities and to immigrants interested in applying for legal permanent residency or citizenship. Based on my previous experience, I found Andy’s proposal innovative and appropriately guided to help the less privilege communities and envisioned to improve their communities by improving their personal socioeconomic standards and deserving of my support and advocacy among members of my circle of influence and local elected officials.
To my pleasant surprise, The Capital Good Fund began operation in February 2009, ninety days prior to Andy submitting his thesis for his final grading, the thesis was shared with the cooperating community, an initial infrastructure is in place and must importantly an invitation to the community to be inform about the progress achieve and seek further input from the residents and a commitment to capitalizing the fund and continue it’s operation by increasing the loans to the entrepreneurial immigrant community.
The Capital Good Fund willingness to learn from the successes and failures of other organizations and students experience with the less privilege community rather than imposing a preconceive solution is a breath of fresh air. It’s fostering interaction, intent to take an open, transparent approach to everything it does, sharing what works and what doesn’t work, and collaborating with others to better serve our borrowers departs from the previous “we know best” approach. While it’s goal not to develop proprietary lending models or loan products, but rather to make available to anyone and everyone information about it’s programs in order that more people in more places can benefit from innovations in microfinance has the potential of developing the needed structure to improve the access to capital in the less privilege immigrant communities.
There is a a great need for The Capital Good Fund’s services across the United States in general, and in Providence in particular. 50 million Americans have no credit score and millions more suffer from poor credit, effectively shutting them out of the mainstream financial system. As a result, America’s working poor rely on fringe and predatory financial services such as payday loans, loan sharks and check cashers, which taken together are now a $100 billion industry[1] . In Providence, a poverty rate of 25% (concentrated among women, children and minorities) and an unemployment rate of 9.3% are forcing families to seek additional streams of revenue through home-based businesses and other related ventures[2] . The Capital Good Fund’s services will enable low-income Providence residents to 1) start and expand their businesses through affordable loans, 2) access services such as business and financial literacy training, 3) build credit history through successful loan repayments and 4) open bank accounts. There are currently several hundred MFIs operating in the United States, the majority of which have failed to grow to meet the tremendous demand indicated by the size of the fringe and predatory financial markets[3]
In conclusion, The Capital Good Fund represents a departure from previous research thesis projects I have experienced with the Brown University students and in my humble opinion is a Project with Transformational Potential for the student community to institutionalize a socioeconomic changing institution in the less privilege communities in Rhode Island.
[1]
http://www.nytimes.com/2008/11/09/magazine/09nixt.html?pagewanted=1&ref=magazine
[2]
Pathways To Opportunity: Building Prosperity in Providence, page 9 November, 2007
[3]
The Capital Good Fund Executive Summary
