How valuable is information to you? Americans are notorious as knowledge seekers … ones that can’t just wait for the information to arrive, but ones that want the agenda ahead of time, details of an event before it happens or to discover before the doctor’s diagnoses what ails them. But what if you were placed into a country where you don’t speak the language, where you are not familiar with the food or housing; all because you may have to live in misery if you don’t leave your homeland. If you were given the information and knowledge to promote economic self-sufficiency, would that be helpful? Today, the Denver metro area is home to thousands of refugees and political asylees from Asia, Africa, Europe and South America. When they arrived, most did not even know where Colorado was located. Since the 1980s, Colorado has resettled more than 45,000 refugees. Consistent with national resettlement trends, the 1980s were dominated by arrivals from East Asia, the 1990s by arrivals from Europe and the former Soviet Union, and the early 2000s by arrivals from Africa. Recently, refugees from Asia (Burma, Bhutan, Nepal and Afghanistan), Africa (Somalia, Democratic Republic of Congo, Sudan and Eritrea), and the Middle East (Iraq) are the largest populations being settled.
Within Colorado, the counties most impacted by refugee resettlement and their approximate overall percentages of the resettled population are Denver (45%), Aurora (35%) and Adams (10%). However, since the end of 2007, Colorado has experienced unanticipated arrival of secondary migrants (refugees initially resettled in another state but who chose to move to Colorado) to its northern and rural counties of Weld and Morgan because of the employment opportunities offered by the meatpacking jobs in the respective cities of Greeley and Ft. Morgan.
The Colorado Refugee Services Program (CRSP) coordinates resettlement and services in the state. Colorado has designated refugee resettlement agencies and other service providers engaged in the provision of English language classes, job training, employment placement, legal services and health care.
In a regular economy, refugees in Colorado gain employment in hospitality, meatpacking, light manufacturing, warehousing, housekeeping and various jobs associated with the Denver International Airport (cleaning, car rental, parking, etc.). Have you passed them by, never giving much thought to what their life has been like? These jobs rarely provide an opportunity for a refugee to support his/her family, and therefore make it more likely that the refugee family will remain on the outskirts of mainstream society and continuously dependent on public assistance. Through these unsustainable employment opportunities, refugees do not make enough money to achieve self-sufficiency and are further isolated from the possibility of social and financial integration.
The state coordinator of CRSP, Paul Stein, identified this missing link in 2009 and partnered with Spring Institute for Intercultural Learning to incubate a culturally and linguistically appropriate financial services entity that promotes economic self-sufficiency. Sisay Teklu, an expert in the field of micro-finance and asset development and the executive director of Community Enterprise Development Services (CDES) described the initial period as follows: “I was assigned and responsible to design strategies, develop the operations system, and initiate three interrelated financial services namely: micro-enterprise development, individual development account and financial education. An initial grant from CRSP helped to lease office space; hire additional staff; and provide micro-loans, matching fund and financial empowerment classes. In addition a grant from the Mile High United Way and Office of Refugee Resettlement (ORR) both boosted the provision of services to a significant number of new comers to the USA.” The three financial service programs were transformed in 2011, and Community Enterprise Development Services (CEDS) was incorporated as a nonprofit legal entity located at 1600 Downing Street, Denver, Colorado.
Traditional forms of capital are rarely available to those individuals as they don’t typically satisfy the standard financial institution’s criteria for a business loan. Mainstream financial institutions lend on the basis of a credit score and before collateral—usually real estate ownership, established business track record, 20-30 percent equity contribution, loan amounts more than $100,000, personal and professional skills and the general capability to own and run a business. All are beyond the reach of a typical micro-enterprise owner. The target market’s options for accessing needed resources within the community are limited to deferred deposit lenders, check cashing outlets, informal lending and predatory lenders.
However, many refugees/immigrants came to the United States with entrepreneurial and business experience and qualification in their country of origin. With appropriate intervention, they are ready to start and operate a business and become contributing members of society. This information gave Abdela, an asylee from Ethiopia, a hand up. In addition to his individual development savings account (IDA); Abdela borrowed a total of $22,000 in three different installments from the comprehensive economic development strategy (CEDS) micro-loan program. He has proved to be a successful business owner and is actively repaying his loan. At present, he is self-employed and has created employment opportunity for his wife and two other Denver residents.
Employment of the low-income population is often entry-level and low-wage, a position and earning amount far from meeting basic needs. A 2007 Colorado Center on Law and Policy (CCLP) report showed one in five Colorado households cannot afford to make ends meet. Due to the existing economic recession, this is, definitely exacerbated. To meet basic needs, a family with one adult, one preschooler and one school-age child living in Denver still requires nearly three times Colorado’s 2008 minimum wage of $7.02 per hour (The Self-Sufficiency Standard for Colorado 2008: A Family Needs Budget). Without any appropriate intervention such as the IDA, this lifestyle will only consist of poverty and constant dependence on public support without a better future.
Tesfay, a refugee from Eritrea and a high school teacher in his home country, began his employment in the United States as a cashier at K & G Stores. He used his first job to establish himself in his new home but dreamed of securing employment that provided more independence and opportunity. In October 2011, Tesfay met with Teklu, and discussed his ambition to own and operate a commercial trucking business. Teklu advised Tesfay to attend a series of financial education and business training classes, identify the necessary steps for attaining a commercial driver’s license (CDL) in Colorado, and to meet with a CEDS loan manager and learn how to get access to an appropriate business resource. He was also advised to mobilize additional funds to cover the initial investment and identify an experienced truck operator to serve as a mentor and adviser.
Tesfay actively participated in all the training sessions and saved properly into his IDA. He proved his entrepreneurial skills and was able to perform all necessary steps on his way to becoming a commercial truck owner. He used his IDA savings and matching funds to cover the costs of the CDL college and to acquire business license expenses. He bought a truck by combining his own savings and gifts from his community members and securing a business loan from CEDS. When asked about what contributed to his success, Tesfay said, “Not only the training and savings but, the IDA and loan manager’s intensive and continuous guidance and follow-up were uplifting my dream to own a business. Thank you, for helping me to help myself.”
From 2010 up to 2012 the IDA program assisted close to 150 new Americans to open their business, buy their first home and attend various classes or recertification programs. The micro-loan program provided a total of 14 business loans to taxi cab, shuttle and truck drivers; ethnic grocery store and restaurant owners; and other retail businesses. The program disbursed $120,000 in loan funds and helped to realize newcomers American dream, boosted business and other asset ownership in the Denver metro area and has maintained a 100 percent loan repayment track record. A total of $1 million in grant monies were secured in October 2012 to be disbursed over the coming four years to expand the provision of the loan program. Accordingly, 20 business loans will be provided each year to promote business and entrepreneurship even further.
The above two programs are supported by formal group-based financial education classes, one to one business loan or other asset development coaching, and pre- and post-loan technical assistant to business loan borrowers. Access to financial education is particularly important to new Americans who came from a totally different banking, saving, business and household income management and tax systems. Over the past three years the financial education program was instrumental to more than 300 clients to help them make informed financial decisions.
CEDS is one effective intervention to attain self-sufficiency and plays an exemplary role to reduce poverty and stabilize living conditions of newcomers to Colorado beyond just survival mode. However, the designing and implantation of the financial services requires due consideration to the cultural and linguistic realities of the niche market. The financial services are truly effective means of adding new Americans as productive members and tax payers of their society. This in turn is a cost-effective means of social and economic integration to build a peaceful and harmonious neighborhood and society.
Authors: Sisay Teklu, MA in economics is the founder and executive director of CEDS, project and program designer and operator, effective leader and organizer, trainer and educator of small business, microfinance and entrepreneurship. He has managed large ongoing businesses and investment projects and counseled more than 100 micro-/small business owners in the areas of business start-ups, marketing, business plan development, financial management and financing. He has demonstrated ability to add value to stakeholders and is a motivator.
Candace Ruiz, MBA, is the co-Founder and managing director, speaker, trainer and corporate social responsibility specialist at Business Service Corps, LLC (BSC). As a social enterprise, BSC assists companies with high-impact community engagement programs. The company has developed a unique experiential leadership training program focused on corporate, global and community citizenship. Candace is also a part-time professor of business in the Colorado Community College System. To learn more about Business Service Corps, visit www.BusinessServiceCorps.com