show me the ropes: starting a campus mfi vanessa carter, lend for america katelyn mccarthy, hoosier...
TRANSCRIPT
Show Me The Ropes: Starting a Campus MFI
Vanessa Carter, Lend for AmericaKatelyn McCarthy, Hoosier Social Impact
Fund at Indiana University
Agenda• Context
– Why students – Define campus MFI– Typical Start Up Stories
• What’s your idea?• Case Study: Katelyn McCarthy• Steps to Start Up
– Before you start– Products and Services– Legal– Team– Fundraising– Set Goals: Start up milestones
• How LFA can Help– Free, Public Resources (webinars, publications, start up kit)– Fellowship– Membership
• Resource Library• Annual Review• Site Visits• Data Collection
• Questions
Why Students
• Time• Low Cost• Underserved Markets• Creativity
Define Campus MFI
Team of students who go off campus and find people who need help. They offer basic financial advice and lend small amounts of money they have raised.
Campus MFI Models
Community Empowerment Fund, UNC Chapel Hill
University of North CarolinaFounded in 2009~200 student volunteersClients served 2013-14: 351
Yale University in New Haven, CT Founded 2001~50 student staff2012 Operating Budget: $13,000501c3 Nonprofit Corporation
Elmseed Enterprise Fund Client: Antoine Scott
Introductions
• Have you started yet? What stage are you in?
• What products or services might be relevant in your community (loans, savings, training)?
• How are you learning about your community?
Common Start-Up Stories
• International Microfinance Inspiration• Struggling Local Community• Business Plan Competition• Lend for America Fellowship• Social Entrepreneurship Class
CASE STUDY: HOOSIER SOCIAL IMPACT FUND
Katelyn McCarthy
Before You Start
• Get to know your community (go to ‘Connecting to Your Community’ at 10:30 in Chevron)– Focus groups– Interviews– Volunteer– Talk to Community Organizations
• Find at least two committed students• Learn about the issues
Products & ServicesTypes of
Products and Services
Definition
Loan Packaging Help prospective borrower with loan application
One on One Coaching Basic advice on marketing, financial management, biz basics
Training Classes Teach a curriculum to a group of individuals
Banking and Savings Help clients open and maintain bank accounts
Microloans Installment loans under $10,000 for entrepreneurs with small, informal, or home- based businesses
Credit Builder Loans Installment loan of $100-$1,000 for the purpose to help client open new, active accounts on credit report
Payday Alternative/Emergency Loans
Installment loan under $1,000 for consumer needs
Financial Products & ServicesProduct or Service 501 c 3
req’d?
Start Up Capital Needed
Campus MFI Examples
Microloans Yes $2,500 Elmseed Enterprise Fund
Credit Builder Loans Yes $1,000 Intersect Fund, Capital Good Fund
Other Consumer Loans Yes $1,000 JIFFI, Capital Good Fund
Consumer Savings No $0Community
Empowerment Fund, Resource Fund
Training classes and one on one coaching No $0 Capital Good Fund,
Elmseed Enterprise Fund
Kiva Zip No $0 Berkeley Microfinance
Financial Service
Checklist – What You Need
Microloans
Lending infrastructure:1) Incorporation in your state2) Bank Account3) Process for application intake4) Access to pulling client credit reports5) Process for approval6) Process for disbursal7) Access to reporting loan payments8) Process for collections9) Team focused on sales
Credit Builder Loans
Credentialed through Credit Builders Alliance1) CBA Member Fee2) Office Space with physical signage3) 501c3 registration4) Three loans5) Two Letters of support6) Metro2 Software
Other Consumer
Loans
Legal research: 1) Do you need a lending license in your state?2) Is there a maximum interest rate you can charge?
Checklists
Financial Service Checklist – What You Need
Consumer Savings
1) Partner depository institution2) Research on local products available for your target market3) Channel to reach clients in your target market
Training classes and one on one coaching
1) Outgoing people comfortable teaching or coaching adults2) Experience coaching3) Training – you need to get trained
Kiva Zip
1) Apply to be a trustee 2) Outgoing people comfortable with sales3) Research and training on Kiva Zip’s process4) Good writers who can help prospective borrowers post
descriptions
Checklists
Kiva Zip Trustee
501(c) 3 Student organization
Academic
Yale; Georgetown; Arizona State; U of Alabama; Rutgers*; Brown*; Southern Methodist University;UNC Chapel Hill*; University of the Pacific; BYU; U of Notre Dame
UC Berkeley; Wesleyan University; Haverford; Claremont McKenna College; U of Houston
University of Michigan; Hamilton College; Northwestern
U of Arizona; St. Cloud State; Bentley; Saint Francis University
Legal Structure
*A 501(c)3 with full-time staff
Rocket Lawyer
• Free incorporation• $49.99 per month
Team
• Structure– Hiring for specific positions– Give people titles and clear
responsibilities
• Plan for Leadership Transitions– Go to ‘Top Strategies for Managing a
Volunteer Run Campus MFI’ – 1:40pm in Chevron
Fundraising
• If you file as a 501c3 nonprofit corporation:– Local banks– Foundations– Corporate sponsors
• If you don’t:– On-campus funding for registered student orgs– Business Plan competitions– Family and Friend campaigns (use gofundme or
indiegogo)– Small grant contests (Banking On Youth,Ashoka)
Start-up Milestones
• Serve a client – At least 8 hours of TA– Business Basics Class– Disburse a loan– One on One Financial Coaching
• Raise funding • Incorporate as a non-profit• Open a bank account
Free Public Resources
• Webinars• Publications• Start-up Kit
Fellowship
1. Hands-on experience at a grown up campus MFI
2. $2500 stipend and travel paid 3. Training and mentorship to build a
plan for new campus MFI
Membership
• Resource Library• Annual Review• Site Visits• Data Collection• Networking • Mentorship
Questions?