Three years have passed since a group of women received funds left over from a charitable foundation’s annual grant budget to establish The Women’s Helping Hands Bank. Today, they provide loans to their neighbors for daily living expenses such as appliances, car repairs, college tuition and funerals.
It was one of many examples used Thursday at the St. Louis Microfinance: Gateway to Opportunities conference to showcase the practical and innovative uses of microfinance tools to combat poverty and to assist low-income families and entrepreneurs who do not have access to traditional financial institutions.
The conference brought together practitioners, participants and researchers to discuss work happening around microfinance locally, nationally and globally. It was sponsored by Incarnate Word Foundation, Citi Community Development, Public Policy Research Center and Nonprofit Management and Leadership at University of Missouri-St. Louis.
In addition to learning about microfinance efforts, conference attendees became participants in it. The $25 registration fee was used to create the first Gateway to Opportunities Micro-Investment Grants. Pam Flaherty, President & CEO of the Citi Foundation, awarded the $1,000 grants to recipients, who were selected by conference attendees.
While the microfinance movement initially emerged in underdeveloped countries, its principles are being applied to work with low-income communities in the United States. In fact, St. Louis is home to a growing number of microfinance programs, such as Individual Development Accounts, micro-lending, micro-entrepreneurship and credit-building credit cards that are providing financial opportunities to low- and moderate-income individuals and households.
“Many small businesses, microenterprises and community organizations simply do not have access to credit or financing, yet they are a primary source of job creation and opportunity for underserved communities,” said Bob Annibale, Global Director of Citi Microfinance and Community Development. “Citi works with leaders in the community development finance sector that have deep local roots, so that the much-needed financing we provide is effective in enabling the growth and success of individuals and entrepreneurs.”
Community-based organizations have entered into the micro-lending field in the St. Louis area and are helping low-income individuals make the transition from day-to-day survival to planning for the future. The Women’s Helping Hands Bank offers one of the best examples of how micro-lending can be an essential tool for building healthy communities, said Bridget McDermott Flood, Executive Director of the Incarnate Word Foundation. The foundation provided a $5,000 grant to Catholic Charities Midtown Center, a neighborhood revitalization agency, to partner with 11 women in the neighborhood to start the micro-lending program. The women took control and quickly created their own unique program. The Women’s Helping Hands Bank made its first loan in June 2009.
"Whenever I speak about the Incarnate Word Foundation, the micro-lending program is the program that most engages the imagination,” Flood said. “It is a tangible manifestation of the possibility within people to realize their own potential if they have the tools to do so. The path to creating healthy communities is within the people themselves."
Conference participants heard from speakers who highlighted why innovative financial practices are needed to effectively change the financial situations of low-income individuals and households. A 2009 FDIC report found that St. Louis has the greatest racial disparity in “unbanked” and “underbanked” individuals in the country.
Michael Sherraden, Benjamin E. Youngdahl Professor of Social Development and founding director of Center for Social Development at Washington University in St. Louis, said a broad range of low-income people have saved successfully in Individual Development Accounts, which allow savings to accrue by providing matching funds. The goal should be to bring everyone into asset-building policy, with adequate resources for social protections and household development.
“Financial inclusion and asset building have very positive impacts – especially for healthy development and education of the next generation. This is true in all families, rich and poor alike,” said Sherraden, who is internationally recognized for his pioneering work on asset building for low-income individuals and families.
Melanie DiLeo, Missouri State Director for Citi Community Development, said Citi is partnering with St. Louis area organizations like Justine PETERSEN, the nation’s third largest micro-lender, to build credit for entrepreneurs and expand access to financial resources by pairing appropriate products with financial education.
Justine PETERSEN, International Institute of St. Louis, the Center for the Acceleration of African American Business and others also shared their experiences starting and sustaining their unique microenterprise programs.
Sponsors hope St. Louis Microfinance: Gateway to Opportunities will become an annual conference, showcasing myriad applications of microfinance to alleviate poverty in St. Louis.
For more information about St. Louis Microfinance: Gateway to Opportunities, visit our website at http://stlmicrofinanceconference.com
About Incarnate Word Foundation
The Incarnate Word Foundation (IWF) is a ministry of the Sisters of Charity of the Incarnate Word, San Antonio, Texas, a Catholic congregation. For more than 100 years the Sisters of Charity of the Incarnate Word have cared for the people of St. Louis and the surrounding communities. When the sisters’ Incarnate Word Hospital, a part of Deaconess Incarnate Word Health System, was sold in 1997, the foundation was established with an endowment of $30 million. Continuing the congregation’s mission of service to the poor, the foundation focuses two-thirds of its spending—about $1 million annually—in low-income areas of St. Louis.
About Citi Community Development
Citi Community Development (CCD) is leading Citi’s commitment to achieve economic empowerment and growth for underserved individuals, families and communities by expanding access to financial products and services, and building sustainable business solutions and innovative partnerships. Our focus areas include: commercial and philanthropic funding; innovative financial products and services; and collaborations with institutions that expand access to financial products and services for low-income and underserved communities. For more information, please visit www.citicommunitydevelopment.com.
About Citi Microfinance
Working across Citi’s businesses, product groups and geographies, Citi Microfinance serves more than 100 microfinance institutions (MFIs), networks and investors as clients and partners in over 40 countries with products and services spanning the financial spectrum – from financing, access to capital markets, transaction services and hedging foreign exchange risk, to credit, savings, remittances and insurance products - to expand access to financial services for the underserved. For more information, visit www.citi.com/citi/microfinance.
About Public Policy Research Center
The Public Policy Research Center engages the University of Missouri-St. Louis in the metropolitan community through its work with civic, governmental, non profit, and other agencies, as well as with individuals. For more information, visit http://pprc.umsl.edu/
About Nonprofit Management and Leadership Program
The Nonprofit Management and Leadership Program (NPML) offers comprehensive education and training for individuals with varied instructional needs, including students and others pursuing careers in the nonprofit sector; professional nonprofit staff; board members; community leaders; and public sector administrators. For more information, visit http://www.umsl.edu/divisions/graduate/ppa/npml/index.html
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Contacts:
Laura Winter, 314-952-6561
Connie
Farrow, 314-808-1158
