Mercy Corps Northwest looks to expand its microfinance reach
By Christina Williams
Sustainable Business Oregon editor
EcoZoom is among the companies that have taken advantage of the microloan program offered by Mercy Corps Northwest.
For the last decade, Mercy Corps Northwest has filled a niche in Portland, making more than $3 million in loans to business endeavors that wouldn't be able to secure a traditional bank loan.
But while the service, which also includes training and business classes, has theoretically been available to anyone in Washington or Oregon, the bulk of the benefit has been felt in Portland. Now the program is looking to scale up and extend the reach of its microfinance services into rural Oregon.
"We want to extend regionwide," said John Haines, executive director of Mercy Corps Northwest. "I think there's a shortage of capital."
Mercy Corps Northwest was formed in 1998 by the parent organization, Mercy Corps, with the goal of promoting economic self sufficiency in the region.
One important step would be to extend the microloan program to more parts of rural Oregon. Mercy Corps Northwest is looking for partners to team up with to extend the capacity of the program, which is staffed with three very busy loan officers.
While microloan programs in developing nations are under scrutiny, microloans to businesses fill an important niche in the local economy.
Haines, who helped start ShoreBank Pacific in 1997, estimates 50 percent of the program's loans go to upstarts in need of capital to open the doors of their business. Loans range in size from $500 to $20,000. Loans as large as $50,000 are made to established businesses.
With a write-off rate of 6 percent and 7 percent kept in reserves to cover potential bad loans, the program is stable and steadily growing.
"These are people who might not otherwise have access to financial capital," Haines said. He calls it the "bottom of the economic-development barrel."
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