accion texas lending. supporting. inspiring. janie barrera president & ceo
TRANSCRIPT
ACCION TexasACCION Texaswww.acciontexas.orgwww.acciontexas.org
Lending. Supporting. Inspiring.
Janie BarreraPresident & CEO
EntrepreneurshipEntrepreneurship
“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”
(Bill Drayton, CEO, chair and founder of Ashoka
ACCION TexasMission
The mission of ACCION Texas is to provide credit to small businesses that do not have access to loans from commercial sources. Through its loans and services, ACCION Texas helps microentrepreneurs strengthen their businesses, stabilize and increase their incomes, create additional employment and contribute to the economic revitalization of their communities.
Business Model
• Grants for operations
• Grants for loan pool
• Investments for loan pool
Our beginning
• $50,000 grant for operations
• $150,000 in loans for loan pool
• 3 full time employees
ACCION TexasACCION Texas
• ACCION Texas has (*):
– 1,773 active clients
– $70,486,000 disbursed (since ’94)
– 9,067 loans (since ‘94)
– $19,348,947 active portfolio
– $10,913 average loan Balance
– 43 full-time employees
(*) As of June 2008
Petra RosalesOwner, Porcelain Dolls By Petra and Jorge
San Antonio, March 1994
McAllen, March 1998
Houston, September 1998
Dallas/Fort Worth, January 1999
Brownsville, May 1999
Austin, May 1999
El Paso, August 1999
Corpus Christi, August 2004
Laredo, September 2005
Arlington, December 2007
ACCION TexasACCION TexasOfficesOffices
Results - the “Real MeasureResults - the “Real Measure” ”
• Largest micro loan portfolio in US – almost $20 million
• Doubled portfolio in 3 years - great performance
– Delinquencies - < 5%
– Charge Offs - < 5%
– Restructures - < 2%
• Won 2007 Wachovia NEXT Award as best CDFI of over 600 with $50 million or less in assets. Winner based on community impact, bold and compelling mission, potential for explosive growth
Results - ContinuedResults - Continued
• Citi $30 Million Investment
- - First in the U.S.
• AAA CARS Rating
- - 2nd year in a row
• Investment Grade Portfolio
- - Potential to Rate Other Microloan Funds
05
101520253035
$ M
illio
ns2007-08 Portfolio ACCION Network
ACCION Texas All Others
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
2007-08 Annualized Rate of Default ACCION Network
ACCION Texas All Others
0%2%4%6%8%
10%12%14%
2007-08 Delinquency ACCION Network
ACCION Texas All Others
0%
2%
4%
6%
8%2007-08 Restructures ACCION Network
ACCION Texas All Others
ACCION Texas Loan & Micro-Loan Management Service Areas
Albuquerque
Chicago
Cleveland
ACCION Texas Loan Program Service Area
Micro-Loan Management Service Sites
Denver
Pierre
Columbus
($300,000)
($150,000)
$0
$150,000
$300,000
$450,000
$600,000 Ju
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The Road to Self Sufficiency
Revenues Expenses Net From Operations
Operational Advantages
• Disburse over $1 million month/ loan 2 every hour
• Collateral support system wide – any CSR can support any loan officer – demand based.
• Cross department support – “Collections a Team Sport at ACCION Texas”
• Streamlined loan process –
MMSNationwide Microloan Management Services
• Proprietary total loan management system developed by ACCION Texas – 2006
• Single paperless system from application to payoff – auto process online apps
• Reduce loan cycle time by 50%
• High Tech – High Touch
• Clients on board and commitments
How It WorksApplicants
1st Filter
Pre-Approved by TiersDenied
Risk AssessmentBad Risk
Loan Officer Review
Underwriting
Processing
Documents Requested
Close Loan
MMS
• With implementation of ACCION Texas Microloan Management System, CDFI micro lenders and other lenders (Credit Union) have the potential:
– double their loan production
– reduce overhead staff
– or a combination of the two.
– Savings of time and multiple $ millions
Business Environment: Business Environment:
• Falling Home Prices
• Credit Crisis
• Energy + Food + Healthcare
• Unemployment: Rising
• Stocks: Falling
• Yield Premiums: Increasing
ACCION Texas ResponseACCION Texas Response
• Maintain rates
• New sources of revenue
• Prudent increase in provisions
• Focus on portfolio performance
• Continue expanding
Conclusion
• Social and Economic Mission
• From modest beginnings to biggest and best
• Our constraint is not eligible clients. It is Capital
• Proven business practices in a non-profit world
• Be lowest cost provider of microloans nationally
• Pursue strategic partners