October 7, 2014
Written by Tran Thanh Thao, Director of Bancassurance Division, Baoviet Insurance Corporation of Vietnam
This is our second working day in Economic Empowerment Program hosted by Montana University – one of three Professional Fellows Programs initiated and sponsored by the US Department of State and for me today is so special. I had wonderful morning to experience exactly what Dr.Tobin Shearer from Montana University told yesterday about the existence in harmony of collective identity and personal choice in American culture and society. My reflection may go a little bit further from traditional concepts of race, land, religion, politics, independence and so on as I am referring to a mechanism where the whole community from federal to state level is creating opportunities to underserved populations that they would not have otherwise. Such mechanism is right here, in Montana Community Development Corporation (Montana CDC).
If you have a dream and passion to run a business just as small as a mobile coffee shop on the street but are not eligible to bank’s lending criteria, you would normally give up. However, with Montana CDC you will not only have access to funding but also the consulting and training services that every start-up enterprise would pay a fortune to learn. Millions of dollars have been spent, thousands of businesses and poor people have been given a leg up for years through such system as in Montana CDC. In the US, there are more than 800 CDFIs (Credit Development Financial Institution Funds) like Montana CDC which provide credit and financial services in such that way. 800 – a huge number and they are all not-for-profits organizations, just moving toward the mission to make the communities more energetic and low-income people would end up with happier and wealthier life. What I see miracle in this system is that it is really giving people a “fishing line” instead of “fishes”. Money funded would be thrown away when most start-up businesses often have no clear idea of what to do with a business plan, how to make accounting and financial analysis, or even what problems their coming products or services are actually solving. CDFIs surpass other financial institutions like banks in that way by providing constant support in every aspect of business through business coaching to help newbies move to a next level of sustainable development. CDFIs are therefore more than lenders but a business companions actually.
I happened to refer CDFIs to what is going on with failure of hundreds of micro-finance projects in my country Vietnam, likewise in many developing countries. Lots of money are poured with a view to helping farmers, fishermen to buy modern equipment, renovate their ships but not a true continuous consultancy support from A-Z like growing techniques, preservation methods, packaging, how to find target market for their produces is available. Unlike experienced enterprises, low-income entrepreneurs and small businesses just do not know what they need on top of funding to succeed. An inner voice is calling me as if I were in charge of making changes: Do not wait until they are aware of their need for business coaching! Just please have a whole strategy to give them a hand then come and show or even force them to take! That’s what I believe a CDFI is supposed to exist, for a broad positive impact on local and regional economy, for opportunities multiplied and for dreams realized!
Feeling happily, I am expecting more best practices to come from American friends for the rest of the fellowship but at the same time I am starting to worry about how to give answers to all of my “why” questions.