WASHINGTON – Beulah Williams – a single mother with three daughters and a son – loved to make women’s Afrocentric clothes, baby’s baptism robes and children’s outfits and had long hoped to start her own business.
At 51, her face was familiar at the bank where she had held accounts for most of her adult life. But she couldn’t get a business start-up loan there because her balance was always too small, she said.
But two years ago she banded together with six other women in similar situations to participate in a trial program designed to help them get small loans and boost one another’s business savvy.
The program, launched in Montgomery County by the nonprofit Foundation for International Community Assistance, is designed to give loans of between $500 and $3,000 to the poor, especially single mothers, so they can have greater self sufficiency. The foundation has leant $20,250 to two business groups operating in the county since the program was launched in November 1994.
Calling the program a “great anti-poverty tool,” Rep. Constance Morella, R-Montgomery County, is urging other women to form peer groups to get loans. She’s co-sponsoring a forum on the program at 7:30 p.m. Wednesday at the Rockville City Hall.
“We want to see how this can work in our own hometown,” she said.
To qualify, participants must be 18, have an idea for a business and a reference. They must have lived in the area for at least a year and be a part of a business group.
Williams’ group, the New Era Business Association, has launched small, mostly in-home businesses like quilt making, clothes making and a day care center with the money the foundation loaned them. Group members will be on hand at the forum to sell their wares and share their experiences.
“Before this, I was really struggling,” said Williams, of Olney. “I was living month to month. I paid all my bills but was barely making it.
“Now my financial status is good and I have credit.”
A second group, Successful Goals, has been getting loans in Montgomery County since June 1995 for home businesses. A third group is in the works, said Leslie Tyler, program director for the foundation.
Several more groups could be formed this year if there is interest, Tyler said. New groups would be run in a similar fashion to Williams’ group.
The New Era Business Association meets twice each month to share business tips. Members talk about how to advertise, how to keep books and how to boost productivity. They even share materials, like scraps of fabric.
Once a month, the group collects funds at its meeting to make a single payment to the foundation.
The money the foundation lends to the Montgomery County participants comes from grants made by two local banks, the Potomac Valley Bank and Citibank, and the Charles Stewart Mott Foundation, of Michigan.
The foundation charges 16 percent interest on the loans, Tyler said. The foundation’s administrative costs are paid by the interest and other grants from Chevy Chase Bank, the Potomac Rotary Club, Mellon Bank and the Mott Foundation, she said.
All repaid capital is reserved for future loans.
If anyone in the group is unable to make a payment, the rest of the group is expected to cover. Only one person in Williams’ group has had difficulty making payments, she said. That woman worked for some of the other businesses to help cover her debt.
The concept of making these types of loans, called “micro- credit,” was developed about 20 years ago by the Grameen Bank in Bangladesh, Tyler said.
More than 50,000 American families have participated in similar programs sponsored by U.S. banks in recent years, including in Baltimore, Washington, D.C., and Northern Virginia.
The foundation, started by a former Peace Corps volunteer about 10 years ago, also has initiated programs in Central America, Africa, Asia and Eastern Europe. -30-