Social Capitalists: Profile
By Michael Prospero
Field: Business development
Budget: $0.5 million
Soon after Kersten Hostetter became the executive director of the MicroBusiness Development Corp., a local teen named Lizard approached her. "I can make $1,200 a week selling drugs now," he said. "What can you offer me?"
Hostetter was able to offer him a lot, it seems. After that meeting, Lizard joined MBD's youth leadership and loan approval committee, and has become a mentor to other entrepreneurial teens like himself.
He is just one of the success stories that have come out of the MicroBusiness Development Corp., which, in addition to helping teens, has provided microbusiness loans ranging from $500 to $30,000 and training programs for minority and low-income entrepreneurs in Denver.
Created by the merger of two micro-enterprise organizations in 1999, MBD has helped create 3,278 jobs, disbursed nearly $2 million in loans to 580 entrepreneurs -- with a 96.4% repayment rate -- and added $15.2 million to Colorado's payroll and sales tax base. Of the 580 businesses which have borrowed from MBD, 470 are still in business.
MBD has four lending programs that cater to entrepreneurs and businesses of all sizes, from a toxic-waste disposal company to Ultrasound Magazine, a publication that caters to the hip-hop culture in the Denver metro area. The magazine was established in 2001 by Celia Herrera, a 20-year-old single mother, and distributed its first 3,000-run issue in 2002.
The corporation's youth entrepreneur program targets inner-city teenagers, many of whom are homeless. "There was this whole sector of youths not in school or not participating in school that we wanted to reach," Hostetter says.
Aside from the youth program, MBD offers several tiered lending programs: MicrocreditWorks, which distributes loans from $500 to $5,000 for business startups and expansion, and doesn't require credit checks or collateral; OpportunityWorks, for loans from $1,500 to $3,500; and BusinessWorks, which disburses small-business loans ranging from $3,000 to $30,000. Another program, called CommunityWorks, applies the philosophies of entrepreneurship to communities working to revitalize their economy.
But what distinguishes MBD from other lending programs, Hostetter says, is the training that MBD provides to budding businesspeople. "Where we've decided to make our niche is with these services," she says. "Business development and training is something that sets microenterprise apart."
At the core of MBD's lending and assistance programs is a philosophy of self-sufficiency. "Our job is the next time they need a loan, they don't need us," says Hostetter. "That's creating opportunity, not charity."
Kersten M. Hostetter, Executive director
Kersten M. Hostetter is one of the founding members of the Colorado Alliance for Microenterpise Initiatives (CAMI) and chairperson of its board of directors. In 2002, she was elected to represent the State Associations for Microenterprise on the national level by serving on the Association for Enterprise Opportunity (AEO) board of directors. Hostetter chairs AEO's Conference and State Microenterprise Association committees and serves on two Colorado state councils. Since 1997, she has begun numerous initiatives, including a guaranteed lending program, a technical assistance program, a program offering loans and technical assistance to youth, and the Technical Assistance Site Assessment (TASA) program. Hostetter received the 2003 Small Business Administration Financial Advocate of the Year award.
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