$60,000 Grant to Sinte Gleska College Institute: Loan program to fund entrepreneursNov 15th, 1989 | By tcj | Category: 1-3: Students: Coming In, Building Skills, Moving On, Tribal College News
The money and support needed to start small businesses on the Rosebud Sioux Reservation of South Dakota will soon be provided from an innovative new program at Sinte Gleska College’s Institute for Economic Development.
Supported by a $60,000 matching grant from the Neighborhood Reinvestment Corporation, the institute is creating a revolving loan fund that will provide money to tribal members who would like to establish small-scale business ventures called micro enterprises.
Micro enterprises range from carpentry services to the marketing of homemade crafts, says institute Director Schuyler Houser. Typically, services are provided within the reservation community for other tribal members, although help will be given to artists to sell their work outside the community. In all cases, however, the goal is to build a self-supporting economy in an area that has few available jobs.
The grant from the Congressionally-chartered, nonprofit Neighborhood Reinvestment Corporation is being matched by the Threshold Foundation of San Francisco, the Sinte Gleska College, and the Charles Stewart Mott Foundation. A loan from the Rosebud Sioux Tribe has been offered and additional support comes from the Farmers State Bank in Mission, South Dakota.
To be based at the college, the Rosebud Reservation Enterprise Center will provide loans for as little as $500 and, in time, up to a maximum of $10,000. The first loans are expected to be made this spring and about 45 micro enterprises should be funded during the first year.
The enterprise center is based on a model first used in Bangladesh in the early 1970s and has been used since in Canada, Latin America and other Indian reservations. Houser says it is different—and successful—because “it relies on character, not collateral.”
People are only funded after they join a group of four to five other entrepreneurs. While each person is pursuing their own business, each member of the group is a cosigner for the loans made. Because of this shared financial responsibility, group members understand the value of being selective and providing mutual support.
The economic center will help the group develop sound business plans, but will first approve loans to only two people. Only after these first recipients have demonstrated that they can begin repayment are the other businesses funded. Since the rest of the group understands that approval of their business depends on the success of the others, the sense of shared responsibility is again reinforced.
Moreover, Houser says, the model works. A similar program on three Canadian Indian reserves had no defaults as it was followed over a 30 month period.