Gift launches micro-lending programPromising ideas can make for great businesses with the proper planning and start-up funding, according to Metropolitan State College of Denver Center for Innovation Director Mick Jackowski.
"It’s important for entrepreneurs to understand that they can accomplish a lot with small amounts of capital."
- Mick Jackowski, Director of the Center for Innovation
To ensure that entrepreneurs have the proper foundation, the Center has formed an alliance with The Rocky Mountain MicroFinance Institute (RMMFI's) to provide a micro-lending program. The initiative, launched with a $25,000 anonymous gift to the Center, is scheduled to start in September.
Popular among developing countries, micro-lending is part of a new trend among higher education institutions to provide financing for community and student start-ups. The programs can also be employed to help higher education institutions meet their missions. It's of particular significance to institutions that serve a diverse and underserved population, according to Jackowski.
"With our vision of being an urban land grant institution, we're about creating opportunities so that people can succeed," says Jackowski. "We're about creating opportunities for underserved entrepreneurs that show us viable business plans. We want to help you get it off the ground."
Loans will range from $250 to $1,000, and be distributed once a quarter, with the earliest distribution set for January 2010. The terms will be for six month, with an interest rate of nine percent. When micro-loans are repaid, program borrowers will be eligible to receive increasing loan amounts.
Pre-requisites for the loan include taking any combination of three courses from an approved list of businesses development courses offered by the Center or RMMFI. The loan is considered a builder loan and loan repayment will be reported through RMMFI's partnership with Credit Builder's Alliance.
An example of the impact the program can have was demonstrated in the Center's Creative Problem-Solving course this past spring. Students in the course participated in a $20 Challenge, which required them to start a business on $20 and show a 500% return on investment (ROI).
One student launched a custom decorative space saving business called Deco Mounts, LLC to meet the challenge of storing his snowboards. He was able to show an 802.6 ROI on his idea. Another student sold handmade scarves to residents in retirement homes and showed a 966.65 percent ROI. Students in the class in the fall will be challenged to see what they can do with $20.
"It's important for entrepreneurs to understand that they can accomplish a lot with small amounts of capital," says Jackowski. To learn more about the program, go to http://www.metrostateinnovate.org/.