Despite the riots, Jackson wanted to keep her modest dream-Quality Building Maintenance Services-alive. Both she and her husband had always worked. She’d been a clerk in hospitals, but she couldn’t imagine going back to that after the freedom of owning a business. And so she started going to meetings-there were all kinds of meetings for people with small businesses in the weeks after the riot. “‘We’re gonna help you,’ they said,” Ava recalls. “‘We’re here for you.’ A lot of talk. A lot of nothing.”
With one exception: an exotic and remarkable program-based on principles developed in the early 1980s by Mohammed Yunus for the Grameen Bank in Bangladesh-that loaned small amounts of money to poor women starting their own businesses, even those without any collateral. The program was run by the Coalition for Women’s Economic Development (CWED) and it is part of what is becoming an international entrepreneurial brush fire. “We have 107 loans out, an average of about $1,500 per loan [with 15 percent interest], to people who couldn’t dream of getting money any other way,” says Forescee Hogan Rowles, CWED’s director. “And we have a repayment rate of 95 percent.”
The results are not unusual. “This is an idea that actually works,” says Jack Litzenberg of the Charles Stewart Mott Foundation, which has provided seed money for CWED and 28 other micro-enterprise loan programs across the country. (Hillary Clinton served on the board of one of them in Arkansas.) “Most social programs can’t deliver on what they promise. This doesn’t promise the sky. It promises a ladder.” And it isn’t very expensive: the Mott Foundation has launched 1,166 small businesses on an investment of about $5 million.
The secret of the Grameen system-which is also proving successful in other parts of the world, especially Latin America-is reciprocal responsibility. To get her loan, Ava Jackson had to become part of a “solidarity circle” with four other women. They had to meet regularly, scrutinize each other’s business plans-“We’re like the board of directors for five companies,” Ava says-and, ultimately, agree to become jointly responsible for the repayment of all five loans. “The rules are very strict,” says Delphine Pruitt, who supervises solidarity circles for CWED. “No member of the circle gets a loan until all five are ready. They have to meet regularly for eight to 12 weeks to be certified. If any one of them doesn’t show up, the meeting is canceled and the loans delayed. Same thing if you show up more than 15 minutes late without an excuse. I’m tough on that. Some circles go on for months, trying out new members, until they have five who are trustworthy. They learn from each other, find out they have a lot of the same problems. I tell them: ‘You’re on a mission, keep going.’ We’re proving that we can do it for ourselves-and despite what you hear, these people are good business people. If you teach them how to do it, they can do it.”
Even after the riots. About 40 percent of CWED’s borrowers were hurt last April; some were wiped out. Jack Litzenberg of the Mott Foundation pitched in with an emergency grant to help some of those hardest hit to pay off their loans-and CWED continued to grow. Remarkably, it has grown without support, or much interest, from Rebuild Los Angeles-the not-for-profit agency, led by Peter Ueberroth, that is supposedly in charge of post-riot economic development. Ueberroth has been looking for the sort of corporate big-bang support that helped him finance the Los Angeles Olympics in 1984. CWED comes from the opposite direction-not much glitz, no big announcements. It builds economic independence, and a sense of community, slowly but surely from the bottom up.
In Ava Jackson’s solidarity circle-they call themselves Five Star Unlimited-a cleaning service, gift shop, travel agency, typing service and employment consultant are gestating on an initial investment of $7,500. Several of the women have paid off their original loans ahead of schedule and have applied for the next step, loans of $5,000. “I’ve almost paid off my first loan,” says Ava Jackson, who also intends to apply for more. “I’m bidding on city and county jobs now. I won’t tell you I’m over the hump, but hey, it’s looking brighter every day.”
