Posted on Jan 26, 2017 by Jenna Boyer
We are pleased to share a new report with preliminary findings from a multi-year evaluation of our small business and microlending work
For more than 20 years, mission-based lenders Accion and Opportunity Fund have worked alongside small business owners to provide pathways to success. We are constantly inspired by the stories of our clients who have transformed their lives by starting or growing a business. We also have strong data that demonstrates the effectiveness of our lending, like business survival rates, jobs created, business income, and loan repayment rates. However, while these stories and numbers go a great distance in making real the critical impact our work has, they don’t tell the whole story.
In 2015, we partnered with the Accion US Network and research firm Harder+Company to launch a first-of-its-kind, multi-year, national study to gain new understanding of the impact a loan has on our borrowers. The study was generously funded by the W.K. Kellogg Foundation and JP Morgan Chase Foundation, with support from S&P Global. Unlike past evaluation surveys, this project goes more in-depth to understand the holistic, longer-term impacts of our lending, which can’t be captured in numbers alone. The first phase of research, in 2016, asked borrowers to reflect on their goals, their finances (both real and perceived), and how their loan has helped them, 1-2 years after getting a loan.
More than 500 borrowers nationwide took our questionnaire, including 102 Opportunity Fund borrowers (41 from LA and 61 from the Bay Area). Additionally, 188 of those borrowers did an in-depth interview to provide deeper insights – including 21 LA and 20 Bay Area borrowers.
The preliminary findings reveal valuable insights from our borrowers:
• Small business owners define success in a variety of ways. For some, the desire for stability outweighs the desire for growth.
• Small business owners hire locally and support the local economy by purchasing inventory and equipment from other local businesses.
• Our clients report their loan has helped improve their cash flow management, sense of financial stability, and self-reliance.
• Many also report having greater control over their time and work-life balance as a result of their loan.
• A loan boosts entrepreneurs’ optimism about achieving their personal and business goals.
At the same time, we learned about some challenges our clients still face:
• Entrepreneurs report working long hours, despite some improvement in work-life balance.
• A majority of our borrowers report they are not prepared for a financial emergency.
To learn more about these preliminary findings:
Check out the overview
from the national sample.
Read about the findings for each of Accion’s lending regions
: East, Illinois/Indiana, Southwest/Rocky Mountains, and San Diego.
This is only the first phase of the project! In the coming year, we’ll be doing another round of surveys and interviews to learn even more from our borrowers and how a loan has helped them up to 3+ years later. The final report will be released in early 2018.