When Muhammad Yunus won the Nobel Peace Prize last year for his work in microcredit, his approach to economics seemed novel: Give small, low-interest loans to people that the banks wouldn’t touch, particularly women. But entrepeneurs in the Third World aren’t the only ones in need of such a vote of confidence; Stateside, many would-be business owners are likewise deemed \”unbankable.\” And, as Yunus observed in Pakistan, many of them happen to be female.

Marsha Bailey, founder and CEO of Women’s Economic Ventures (WEV), has long made a connection between equal rights and economic power. Through her work at Santa Barbara’s Rape Crisis Center, she witnessed women at their most vulnerable.

\”Working there gave me the perspective of where sexism and sexual violence fits into the big picture,\” she says, \”and why it’s so important for women to be economically empowered, because if they are, they become elected to public office, they start changing public policy and really truly have the power to change the environment we live in.\”

With a group of like-minded individuals, Bailey started organizing seminars and workshops centered around women and their approaches to business. This led her to organize small business loans based on Yunus’ Grameen Bank.

\”Self employment seemed like a really viable strategy for us,\” she says. \”We really started out with the assumption that access to capital was the biggest barrier. But what we found was that access to business education was a bigger barrier.\”

Focused on helping women get past glass ceiling issues and better capitalize on their skills, Bailey put together the curriculum for a 14-week WEV Self-Employment Training (SET) course. Or as Andreia Martinez, program manager at WEV’s Ventura/Oxnard office, explains, \”One easy way of alleviating that poverty was through self employment. That’s how the whole class and course came about.\”

Teaching business basics

Based in Santa Barbara, with offices located in Oxnard’s Topa Financial Plaza, WEV is open to men and women alike, with self-employment courses taught in both English and Spanish. (Martinez reports that in the Spanish courses, coed attendance is 50-50).

\”People usually are in two different situations,\” Martinez says. \”One, they’re already in business and looking to learn how to administrate their businesses a little bit better. The other group of people are not in business yet and want to work out that business idea and create a plan.\”

For Bailey, the aim of her curriculum is to \”demystify\” the process of constructing a business.

The course begins with an examination of personal finances. Students are taught financial literacy and budgeting skills and are asked to review household income and various costs. The WEV curriculum prepares women to put these concepts to use in the professional sphere.

There is an element of self-assessment in the first weeks of the course. Fledgling entrepeneurs analyze the reality and feasibility of their business ideas. \”Students narrow down their niche market, research other businesses in this county or city, [and] the population, target population, benchmark pricing [for their business],\” adds Martinez.

Next, students turn their attention to marketing, and guest speakers from print, radio and television media form a panel to help students understand the best advertising tactics.

Then, students create both operations and financial plans.

From learning to loans

WEV’s assistance turns out to be two-fold: in giving new businessmen and -women a chance to realize their business plans, it makes them more attractive loan applicants. By offering microcredit, WEV lets its graduates prove their mettle and eventually turn to commercial financial institutions for loans.

\”The main goal through all of this is self sufficiency, economic independence, getting people bankable,\” says Martinez. To that end, WEV has taken advantage of money distributed through the Community Reinvestment Act (CRA), which encourages banks to reinvest money in the local community. Seven local banks contribute to WEV’s general small business loan fund and this, coupled with a grant from the city of Santa Barbara, enables WEV to award low-interest loans to program participants.

\”We’ve gotten really low-interest loans from banks,\” explains Martinez. \”There is a huge population of people not served by banks.\” There are three loan programs: $5,000 and under, typically considered seed money or equipment funding; the $5,000-25,000 startup loan; and then $25-50,000 expansion loan. Generally, Martinez explains, the largest loans fund businesses that need to jump into the next level.

Any loan over $5,000 must be approved by the loan review committee, which is populated by representatives of the seven contributing banks. \”For a startup [business], it’s really hard to find money in the form of a loan — people usually use personal savings, credit cards,\” says Martinez. \”It’s easier to get a loan to remodel your kitchen then to start a business.\”

Martinez reports that the average term on a WEV-assisted loan is five years.

A WEV success story

But business education and financing aren’t WEV’s only services, as Cathy Cagle, a graduate of WEV’s SET program, attests. Terms like \”variable costs\” weren’t foreign to the WEV graduate when she decided to enroll in SET; with ad sales experience and firsthand observation of a successful enterepeneur, she didn’t need a business education.

But Cagle’s involvement in WEV did inspire her to make her fledgling business a priority.

Cagle owns Mother’s Guild, a breastfeeding resource center that began life as a home-based cloth diaper retailer. Staffed by lactation consultants, Cagle’s store offers free workshops and support groups, including one of the only postpartum support groups in the county, run on the donated time of a licensed psychologist.

\”[WEV] forced me to find the time and concentrate and focus on growing my business,\” she says. \”I found out I was pregnant with my second child in my first week of class. Without that course, I wouldn’t have been as focused.\”

Although Cagle sensed she had more concrete goals in the self-employment training course, she describes the 56 hours as \”transformative.\” \”I was honored, being able to experience part of the growth that everyone in the class was going through. It was life-changing for some people,” says Cagle.

This was not a bond she soon forgot. When it came time for her to hire staff, she turned to her classmates and can now boast two other WEV graduates as employees. \”The graphic designer I used I met at a WEV event five years ago,\” she says.

Like Cagle, WEV member Lorna Adams found the women’s network beneficial. The owner of Novus Publishing recalls a helpful workshop she attended about integrating business on the internet.

\”If you’re a woman business owner, you can join WEV and they have a variety of resources and programs tailored for new businesses, primarily for women owners of small businesses,\” says Adams, who publishes college textbooks and trade books.

So what does it cost to graduate from the SET program?

\”We value our program at around $5,000, because it’s comparable to taking a semester at a university or city college,\” reasons Martinez. \”It’s on that level of education and it’s that length of time and time commitment. But our direct cost is $2,500,” says Martinez.

But that amount is negotiable, and Martinez says that no student is rejected due to lack of funds. There are 130 to 150 people in the county who go through this program each year. \”We’re trying to create something that can be replicable,\” explains Martinez.

Although, the WEV program has transformed its approach since it was founded in the late ’80s, its mission to help women become self-sufficient has never wavered. Bailey is satisfied on this count.

\”We have women who have been able to purchase homes, who never thought they would ever be able to afford to,\” she says. \”A lot of women work and start their businesss on the side, and I think one of our biggest challenges right now, [is to] help women grow those businesses.\”