A Populist approach to fund-raising and the ease of the Internet could channel micro-loans to tens of thousands of women entrepreneurs, if a New York organization's plan takes off.
Count-Me-In For Women's Economic Independence today begins accepting minimum $5 contributions from women, girls and other donors across the country on its Web site, http://www.count-me-in.org. The goal is to take the practice of micro-lending--granting business loans between $500 and $10,000 to applicants who fall below the radar of conventional lenders--and make it both efficient and widely available.
Born out of a Bangladesh experiment 15 years ago, micro-lending is now a common arrow in the quiver of economic development efforts. As many as 600 micro-loan programs nationwide dish out small chunks of capital in a high-touch character-based breed of lending that big banks can't afford to mimic. Larger institutions have turned instead to credit-scoring forms that computers scan for eligibility.
But despite their value, micro-lending programs reach only a small number of business owners and would-be entrepreneurs. Count-Me-In hopes to change that by developing a more flexible type of credit scoring designed to take women's needs into account, said Nell Merlino, co-founder and president.
Through the Internet, it aims to become the first online micro-lender, reaching a vast audience of women who neither qualify for traditional credit-scored loans nor know where to turn for a micro-loan.
Its vast funding source: 136 million women in the U.S. alone. If 1 million women rally four friends to cough up $5 a piece in the first year, the fund will grow to $25 million, a goal expected to translate into 15,000 loans, an online education effort and college scholarships, Merlino said. In addition to heavy promotion beginning today, Count-Me-In is recruiting online women's organizations to agree to divert all their Web traffic to Count-Me-In on May 11 for a fund-raising blitz, she said. The loans will be offered at 2% to 4% above prime, due within one to three years.
"Women continue to have less access to capital, especially women of color," said Merlino, who developed Take Our Daughters to Work Day and heads a communications firm that specializes in public education campaigns that motivate action. "They fall through the cracks of micro-lending and credit scoring."
Divorce, time off to care for children or aging parents, a lack of collateral and propensity to launch service-related businesses all can make women lousy candidates on a credit-scoring form. And the amounts often needed are rejected by many banks as too small to be cost-effective. Count-Me-In's solution is a form of credit-scoring now under development that is designed to be more "woman appropriate."
To that end, the organization is working with San Rafael-based Fair Isaac Inc., developer of credit-scoring software, to devise an "expert score card" that will shed light on an applicant's true entrepreneurial value while taking obstacles women often face into account. The automated form should be complete by late May and the group plans to make its first loan in July.
Still, several experts in the field of micro-lending questioned whether a mass Internet approach can work.
"So much about micro-lending is about relationship building," said Mari Riddle, secretary and board memeber of the Virginia-based Assn. for Enterprise Opportunity, the micro-lending industry's trade group, and head of intermediary programs for the Los Angeles Community Development Bank. "How do you do that online?"
Counters Merlino: "That's the challenge, but we think we can do it. . . . We believe there's enough commonality among these entrepreneurs."
The idea for Count-Me-In was born when Merlino and co-founder and board chairwoman Iris J. Burnett--then a senior vice president for USA Network--attended a 1997 White House women's economic summit. Both were struck by the lack of recognition of women as "producers of wealth and jobs," Merlino said. They were also amazed by another phenomenon taking shape: millions of women were pouring funds into charity in the name of Princess Diana. The average contribution: $30 per person.
"Bake sales, rent parties, given all the progress we've made as women, [we began to think] 'How can we move that further along?' " Merlino said.
The organization is making special efforts to target minority women, and a Spanish-language site is scheduled to launch next month. Black Enterprise Magazine is already directing its site visitors to Count-Me-In, which is also working with black sororities, the International Council of Churches and other minority organizations to spread the word. Initial funding has come from the American Express Foundation, the Barbara Lee Family Foundation, BP Amoco and Reebok International, among others.
Count-Me-In plans to distribute organizer kits online--and pamphlets in Spanish and English offline--to women who can then recruit applicants who are still strangers to cyberspace through church groups, book clubs and elsewhere.