welcome to "beyond the headlines." i'm cheryl jennings. every week we focus on a different topic affecting people who live and work in the day area. today california's unemployment rate is holding steady at a whopping 12.6%. while many are hiring, there are vast members of people looking for work. today's show looks at a way that helps people with limited resources work for themselves as entrepreneurs. it's a service called micro financing. in the face of tight credit and unemployment, micro lenders are providing that small loan, making a big impact on communities across america. last month in san francisco, california first lady maria shriver spoke at the kickoff of a national conference on micro financing. theresa garcia spoke with one of the conference sponsors.

>> reporter: you can just hear and see her passion for children. there is an energy she shares every day at her san francisco home, a home that she's turned into the shining star family child care. >> i had really loved to help my community, especially those parents from low income. >> reporter: she specializes in providing a caring place for low income and homeless parents to bring their children. her small business success is a testament to financial help she was able to secure. >> since i got the loan, i expanded. >> reporter: since 2007, she has received two loans of $10,000 each from opportunity fund a san francisco based nonprofit lender. for the past 15 years, it's been practicing micro financing, providing small business loans for low income people. the everyday workers strive to go get ahead. >> we're making loans in the flea market, we're making loans

to food vendors. >> reporter: eric weaver, ceo of opportunity funds, says loans range from 500 to $10,000. it provided money to entrepreneurs who did not equal fly through a bank. >> we have a 90% repayment rate and 85% business survival rate. the data shows that it's the small businesses that create the lion share of net new jobs in the economy. so it's a very worthwhile endeavor. >> reporter: new case study highlights the positive economic ripple effects of micro lending in the bay area. data shows that for every dollar lent, opportunity fund loans are generate ago two to one financial return as it flows through the regiona creating new wage, new spending and new tax revenue. loans to shining star went into update in the kitchen with new appliances to help provide meals for the children. funds also went to improve the home's siding and backyard play space.

>> i think it's wonderful because giving opportunity. >> reporter: the economic results, she has three employees on payroll and a waiting list of children. theresa garcia, abc 7 news. >> for many hard working people, a solid foundation is out of reach. a single parent with two children in the bay area needs $65,000 just to pay her basic necessities. a minimum wage earner in california working 40 hours a week has an annual gross income of $16,640. one in four bay area families are not self-sufficient and that means they have to make daily trade-offs between paying rent or buying food and staying healthy. joining me in the studio from opportunity fund is erik eric w. we saw a lot in the story and you've got a great track record. you must be so proud of this thing you founded 15 years ago. why did you do it? >> well, i've always believed in

being part of creating a more inclusive financial system. we have a great system in this country for helping people to build wealth and accumulate assets. but it's all targeted at people in the middle and upper income levels of society. the same opportunities don't exist for people that are living paycheck to paycheck. we want to do do something to change that. >> you got a variety of businesses you've helped. we have pictures that reflect some of those businesses. >> we lend to auto mechanics, we lend to daycare providers. we lend to plumbers. we're making loans to food service -- people in the food service industry. it's a range. international, flea market. international micro finance, it's very, very poor people that are living at a subsistence level. here we lend to people that are marginal economically, but lend to thriving businesses that are creating a lot of jobs jobs andl

shut out of the main stream banking system. >> what are the limits for them? why can't they get in the banking system? >> it could be they haven't been in business long enough. it could be they lack collateral, so they want to borrow and don't have a house to put up as home equity. or that the amount they want to borrow is smaller than works for the cost structure of a major bank. >> i talk to people who said they wanted to loan me $60,000 at this huge interest rate and i don't need that much and i could never pay that back. >> exactly. we had one of our clients saying it's like portion control. she said, she came to us and wanted somewhere along the line of $25,000 and we realized that her business couldn't support that and that really was about $8,000, she was going to be having far more manageable credit situation and she thanks us for that. i'm like a -- we're not trying to talk you into a larger loan. we're trying to talk you into an

appropriate loan. >> do you have people who sit with them and look at their business plan? >> absolutely. that's another difference between us and a bank. if you go to a bank seeking a loan on the smaller end, it's entirely a credit score product. they'll look at your personal fico score and if it's high enough, they'll make a loan. we, most of our borrowers have a range of scores. we work with people that have various scores. we look at the business, look at the cash flow, look at alternative sources of collateral like a cosigner or a pink slip on a car. so we find kind of the real story behind the business to make something work. >> to really coach us. >> we call it business advising. we have one business advising that most of our clients participate in and it's really for some of them, they take advantage of a lot of it. for others, their businesses are going g they know what they're doing. we don't force people to sit through training if they don't need it.

>> right. so you had a micro finance portion of this big conference recently. >> yeah. the conference was called micro finance usa and here in san francisco. we did it last year as micro finance california on a much smaller scale. and this year we made it nationwide. we did it in partnership with kila and the u.s. network and micro finance network. it was a great success, in my opinion. >> i was there and i had 700 people i saw. >> we had 700 people. we had a really, really high level of energy. i think it really validated the idea that people, when they learn there is micro finance going on here in the u.s., they may be familiar with it from kiva, that's become a popular place for making loans overseas. when they realize it's here and having an impact here, they become very excited. >> we are going to take a break. eric is going to be with us for the entire half hour here. but we have many more questions

about micro financing and his company, opportunity fund. so stay with us, we'll be right back. ok. what if i just had a small slice? i was good today, i deserve it! or, i could have a medium slice and some celery sticks and they would ccel each other out, right? or...ok. i could ha one large slice and jog in place as i eat it or...ok. how about one large slice while jogging in place followed by eight celery... mmm raspberrcheesecake... i have been thinking about this all day. wow, and you've lost weight! oh yeah, you're welcome. thank you! [ female announcer ] yop. with 30 delicious flavors yoplait. it is so good. so i grabbed my son a juiceed dbox...and left the cooler lid. open. twenty minutes later, all our hot dogs were gone. and so was most of the car. my mercury agent, steve, told me the car was covered. i switched to mercury because i saved hundreds of dollars on my car insurance, but it was the service that really made me a happy camper... er...ex-camper.

call 888-4-mercury or visit mercuryinsurance.com to get a fast, free quote and start saving today. how'd you do that? do what? it tastes too good to be fiber. you ma it taste like chocolate. it has 35% of your daily value of fiber. do it again. turn it into sometng tasty. this guy's doing magic. there's chocolate chips in here w. hod you do that? right! tasty fiber, that's a good one! ok, umm...read her mind. what's she thinking? that's right! i'm not thinking anything! [ male announc ] fiber one chewy bars. cardboard no. delicious yes. welcome back to "beyond the headlines." i'm cheryl jennings. today we are talking about how small loans can make a world of difference. california's first lady, maria shriver, came to san francisco last month to talk about how you can help a small local business with a small loan through the internet. it's called micro financing. and recently she spoke at that conference we talked about of

700 people with a president of kiva. it connects entrepreneurs overseas through the internet with lenders offering a as little as $25. she convinced them to offer the same idea here. today she announced a $300,000 commitment from her women's conference program. >> we invest program, one of the five or six programs that the women's conference support, really looks to help women get on their feet, start their own businesses, teach them what they need to know about starting a business, and financial >> all of that partnered with the opportunity fund with eric weaver and at beyond usa, they raised $850,000 in less than a year to help entrepreneurs in 14 states. and we will show you how to take part in all of that site lat web site later at the end of the show and abc abc 7 news.com. in the studio, eric weaver, the founder and ceo of opportunity fund. eric, we were talking about how your company has been providing

these micro loans to people for 15 years. so who qualifies and what does it take to get qualified? >> i was glad to hear first lady maria shriver talk about women entrepreneurs. 60% of our loans go to women. two-thirds go to people who are members of ethnic communities. we're serving a diversity and people who have historically been left out of the main stream financial system. to qualify for a loan, we're looking for a financially stable business with a good repayment history and with at least one year in business and located in the greater bay area. >> we're looking at pictures. that was part of the conference. this was a taste of entrepreneur. these are the types of folks who can take advantage of what we're talking about. >> absolutely. at the conference we had taste of entrepreneurship. small caters from all over the e conference and it was just a really neat event. >> what is the interest rate, to

get real practical? >> 8% interest rate. and loans are term loans. they're the smallest loan we make is $500. the largest goes up to $100,000. and so we believe in offer ago fairly priced loan product affordable. >> how does somebody get involved if they don't necessarily need a loan, but want to help you? >> we welcome help from donor, volunteers, and lenders on kiva. there is three ways. go to our web site and opportunityfund.org. and look for the donate now back upen. go to the kiva web site, search for opportunity fund clients and make loans to people here in the bay area that are in need of loans. and you can also at our web site, learn about opportunity funders, which is our volunteer group. i want to put in a quick mention for saving. we believe that credit, while very important, it also can be a double-edged sword as we've learned with the recent housing meltdown. so we also offer a match savings

and financial education saving program and we have a web site for that that we offer in partnership with other savings programs in the bay area, including earn. and that's called save together. there you can go and match the savings of someone who is saving to go to college or buy a home or start a small business. >> that's absolutely brilliant. how many people have signed up for that? >> our program has served over 3,000 families now that are signed up and gotten a financial education course and saved toward their asset goals. save together is new. it's like kiva, junior. we hope to see it grow into something that can bring literally millions of dollars into, again, a more inclusive assistance system. >> we'll put that information on our web site. eric will stay with us. we will take a quick break. we are going to meet in just a moment, a woman who is very determined to start her own business and we're going to hear from her how she did it. stay with us. don't go away. how would i make school a beer place?

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yeah. you must really care about him. what? no, no. you gave him fiber. no she didn't. this tastes way too good to be fiber. they're delicious crunchy clusters with sweet honey and half a day's worth of fiber. you care about my fiber? not really. i care about youfiber too. i have for while. ok, carl. why don't you care about her fiber? hey carl. [ male announcer ] fiber one. cardboard no. delicious yes. welcome back to "beyond the headlines." i'm cheryl jennings. we have been talking about micro finance. i recently had a cans to talk to the president of a global lending organization called kiva. and he spoke about international and domestic micro loans and how easy a small loan can make a big, big difference. >> there are some differences between micro opportunity u.s. and micro finance world wide. for example, the loans are much bigger here in the u.s. what you consider micro is

obviously bigger. the average loan in the u.s. on the kiva web site is $7,000. and in the developing world it's about 350, $400. so it's a pretty big difference. one of the really interesting things about the u.s. businesses, though, is that not only can you lend locally, but you can actually go to that shop, say, in san francisco, that bakery that you put $25 into and you can buy a doughnut. you lik be like, actually support that business in two ways. not only lending, but being the consumer. it's kind of a full circle supporting local businesses. the neat thing about micro finance is that it's based on sustainability. it's not a donation. it's not a handout. it's a loan. and the whole principle is that when you get that loan, you pay it back and that money can be reuse to do lend to someone else and help them start their own business. >> recycling the same money, it's a great idea. joining us in the studio is a very successful entrepreneur, simonida cvejic. i hope i said that right. she is the ceo of the bay area

medical academy. did i say it right? n yes. >> you're from serbia and came to this country as an immigrant. tell me a little about that. >> i'm from macedonia, but i'm from an ethnic background from yugoslavia. i came to the united states in 1995. first to new york. i was lucky to get a job in the financial industry. actually worked for goldman sachs for five years as a financial analyst. i have a business and political science background. i have a masters degree that allowed know get a great job, but even with that, you know, fast forward in 2004, i found myself as a single mom. i looked at the options that i had going back maybe to the financial industry. i remembered that we were working 80 to 90 hours a week. i really didn't want to do that.

especially because i had a daughter, two kids, two girls. >> you want to do change your life. how did you hear about the opportunity fund? >> i heard about opportunity fund through the entrepreneurship center where i studied my business. and i had applied for a loan with one of the major banks and it was impersonal process. i filled out a form and got something in the mail that said you are denied and i followed up on the 800 number and then there was no answer. with opportunity fund, their business advisor came, met with me. heard about my story. she saw the school and the students. we spent time together. >> took a personal interest in you? >> yeah. he really took a personal interest in me and then he really looked at the business, you know. what are we really doing? we're training medical technicians and there is potential for growth, and he saw

the students and i got approved. >> and here is the proof of that, getting approved. we have some pictures showing your folks and your company at work. eric, as you're hearing this story, you have a chance to meet psalm psalm during all of this -- simonida cvejic. how do your folks know she would have been a success? it's a gamble. >> well, she's a pretty special case. if you meet her and see the determination she has and she's someone who came to this country as an immigrant, but clearly was very well educated and understood business. so i think frankly, fors she was an easy decision to make. as i mentioned, we lend to people across a wide spectrum. i think to be an entrepreneur and i guess i'm one myself having started this, persistence and determination is the number one quality you look for. we saw that in spades with her. >> all right. wow. that's a high praise. how much has your business changed now? >> my business has definitely grown. we actually have two locations. our main location is in san

francisco. we have 5,000 square feet of space with medical office studying, ikg machines, exam tables and so on. and we also have a location in san jose. so we train close to 400 students a year and we really train them for a career for successful career in the medical field. we recently won a contract with the office of economic and work force development in san francisco to train people who have been recently laid off. so what i really love about this is that now i am able to give back to the community and i'm actually helping other people change their lives. i'm helping other people get jobs and then really get ahead. and for me, the other aspect was that my goal was to really be able to spend quality time with my girls as well. that's what's happening. that's what i'm trying to help my students achieve as well. >> i tell you, this is a double

success story right here. if it hadn't been for your organization, she wouldn't have achieved it. stay here. we're going to take a break. we do have much more to talk about with simonida cvejic and eric. so please don't go away. come right back. ♪ [ female announcer ] why choose between delicious or 100 calories? ♪ with yoplait delights, now you can finally have both. ♪ it's the perfect parfait, with two indulgently rich layers of chocolate and raspberry yogurt and only 100 calories. yoplait delights. get rid of the "or."

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...frontline plus also kills flea eggs and larvae, ...and keeps killing for 30 days -- on dogs and cats. that's why it's... .the #1 choice of vets for their pets, and yours. there's killing, and thers complete killing with frontline plus. welcome back to "beyond the headlines." today we've been talking about the globally successful lending system of something called micro financing. the 2006 nobel peace prize win who are pioneered the concept in his native bangladesh was in san francisco saying micro lending could also work here. he spoke at the commonwealth about his new look and documentary. he has already started micro lending in new york. it provides low interest loans to entrepreneurs who do not have collateral. it could eventually end businesses who prey on poor people with the sky high interest rates. >> if everybody gets a loan and

gets beyond their businesses, city in thecan be built with become the first city in the whole united states which doesn't have any -- >> former secretary of state george schultz. it has provided 8 million poor people with loans under $200 each to start their own businesses. and the repayment rate is nearly 100%. joining me in the studio again are simonida cvejic, the ceo of bay area medical academy and eric weaver, who has been with us the entire half hour. the founder and ceo of opportunity fund. and we've been hearing about how this micro lending helped you, how much did you borrow and how quickly did you pay it back? >> the initial loan was $10,000 and it was enough for me to furnish the classrooms and to biomedical equipment that i needed. and i had follow-up loans by

2008, 38. and with that, the school has grown. we've been able to offer more courses, expand and as i said, we train close to 400 students a year now. >> there is another component that you like, working with opportunity fund. >> what i really liked about it, that it was personal and the difference that i saw between the large bank where i applied and them is they're guided by social returns on capital. they're not looking to make a profit on the loan. that's a huge difference. and in return, what i'm trying to do now is give back. >> eric, this must be so rewarding for you. you can make a good living, but your repayment rate is good, too. >> it's about 90%. all this talk of high repayment rates, i often think that's overhyped. the important thing it's the social return. what's the impact. we take some risk. we do sometimes have loans that don't repay, but it's very few.

and we just really did a study that showed every dollar we invest into the bay area in terms of small businesses, it ge economic2 in annual economic activity. that's $2 year after year after year. our small loan portfolio is generating $17 million in local wage, taxes for localnt, and puf equipment and inventory. >> mohammed had an interesting concept with getting rid of pawn shops and that sort of thing, which sounds impossible. >> payday loan, one thing to point out is that they're primarily providing consumer financing and we're providing business financing. >> that's a big difference. they're investing in people. >> yeah. i think we do need -- we absolutely need alternatives and regulatory fixes for payday lending. and some of us are working on that. we're working right now on an alternative payday product. i think it's important to point out the distinction between

consumer and commercial lending. >> once again, we're almost out of time here. we want to make sure we get the web out out for your company for loans. we'll put that up and have that on our web site. and for your final thoughts, if somebody could take advantage of the fund? >> what i want people to know is, you can start a business with only few hundred dollars. you don't need millions and you can be successful and you can create a better life for yourself and your family and you can get approved from a company like opportunity fund. >> all right. we're going to put that information out there for everybody. thank you so much. that's it for this edition of "beyond the headlines." if you need community sources in your neighborhood, call 211 for help. information about everything on the show is on our web site. bye-bye. fiber one chewy bar. how'd you do that?

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