Lending for Evanston and Northwestern Development (LEND) is a student-run, non-profit microfinance organization in Evanston, Illinois, dedicated to promoting small business development and fighting poverty. By offering small loans, workshops, and consulting services to local entrepreneurs, LEND supports the development of innovative businesses that enrich the Evanston community.

Run by a team of 15 undergraduate students at Northwestern University, LEND provides credit-constrained entrepreneurs with access to vital resources. LEND has disbursed $7,000 in microloans and has provided business training services to over 17 clients. Our efforts have had a tangible impact on local businesses and the community, allowing passionate entrepreneurs the chance to pursue their dreams and reach financial self-sufficiency.

In 2011, LEND won the Evanston Chamber of Commerce's annual Catalyst Award, a sign of the breadth and depth of support and recognition from the City of Evanston, Northwestern University, and a number of local community organizations.

Problem

The recession hit Evanston's less advantaged and poorer residents harder than most, forcing many to take payday loans or halt plans to expand their businesses. Even as the local economy bounces back, low-income entrepreneurs continue to require personalized, carefully crafted business training as well as microloans. Business training covers basic financial accountability and core operations (marketing, for example), and micro-loans serve as capital to use prudently for business start-up or expansion.

Solution

LEND is one of a handful of campus-based organizations that seeks to adapt the international model of microfinance to a domestic context. The model is sustainable since once loans are repaid they can be disbursed to new borrowers -- the same $2,000 can aid 3-4 business over a couple of years. Like many other non-profit microlenders, LEND relies heavily on a relationship of trust and friendship between client and staff to ensure attendance at business training sessions and, more critically, full repayment of microloans. Rather than serving only businesses with a few years under their belt or those that require large sums of capital--as many community banks do--LEND identifies passionate, dedicated entrepreneurs and supports them through crucial stages of business development from startup to storefront. Two or three dedicated staff members meet with clients weekly (or more frequently if necessary) to thoroughly examine the client's operations and finances. Then, 'ambassadors' work with the clients to identify areas to focus on immediately. Clients cite our personalized approach and flexible, compassionate operations as attractive factors. After eight-ten weeks, ambassadors and clients jointly evaluate the results of the business training, and subsequently determine if more time is needed to tackle other issues.

Example

Our first client was a local businesswoman who realized her local salon was in need of a serious overhaul—financially and aesthetically--after inheriting the business from her father. LEND partnered with ECDC to give her a loan to renovate Ebony Barbershop, complete with new flooring and seating. Over the past 1½ years, LEND staff also helped her revamp her business model and improve her marketing efforts, complete with a social media presence, logo design, and updated profit-sharing protocol. Now, she's on the glide path to repaying the last installments of her loan on time. Another early loan client was a local painting contractor seeking to expand his business. As he looked to broaden his area of operations, he ran into one big problem: his car was breaking down. LEND’s loan helped him buy a better, more reliable car, with more space for paint and equipment. LEND staff also helped launch his own website, complete with a promotional video and an upcoming YouTube channel with how-to-paint videos.

Marketplace

Domestic microfinance is a quickly growing movement throughout the United States. LEND is one of 12 pioneering student-run organizations around the country. These organizations are all members of the Campus Microfinance Alliance, a consortium that connects and provides support to these groups. In addition, there are a number of established domestic microlenders such as the Opportunity Fund, U.S. ACCION Network, and Mercy Corps Northwest, among others. Linked by their nonprofit focus and separated by thousands of miles, these micro-lenders eschew competition and instead regularly collaborate and exchange ideas in an effort to expand microfinance and small business development efforts across the country.