Alumni Spotlight: Alex Honjiyo

Alex Honjiyo joined the Hilltop Microfinance Initiative as a loan officer in 2009. He served as CEO from 2010 to 2013 and is currently a member of our board of directors. During his time as CEO, HMFI designed the current organizational structure, achieved its 501(c)3 status, and disbursed loans to its second and third clients. At HMFI, Alex cemented his passion for empowering local communities through access to finance.

Alex has carried this devotion to financial empowerment into his professional life after graduating from Georgetown. In Mexico and in the United States, Alex has worked in private-sector investment as a way to empower low-income communities. He currently works at Chemonics International on democracy and independence projects in Latin America and the Caribbean.

Alex now lives in D.C., only a few blocks from Antojitos Cecibel, the convenience store owned by HMFI’s first client. He shops there regularly. Although he’s the first to credit HMFI’s clients’ successes to a wide variety of factors beyond HMFI, he is proud of playing any part, small or big, in the “success and happiness” of HMFI’s clients.

Alex recalls HMFI achieving 501(c)3 status as one of his biggest accomplishments as CEO. He believes that this milestone was a big step in establishing credibility as an organization. Alex described HMFI’s upcoming goal of gaining credit-reporting capabilities as the “most exciting part” of his 2018. He considers this achievement HMFI’s next big step toward impacting more clients. We are grateful to Alex for his many contributions to HMFI and beyond!

An Introduction to Microfinance

Microfinance is a term that describes financial services aiming to provide alternative financial resources to underbanked communities. The minimum capital requirements on loans offered by many large financial institutions exceed the amount needed for small business owners to invest in and grow their businesses. Therefore, many entrepreneurs who need to access capital turn to unsustainable sources of financing or even risky payday lenders. These institutions often charge triple-digit annual interest rates, use aggressive collection practices, and hook clients into a cycle of debt. Microfinance offers an alternative that is beneficial for borrowers and financially secure for lenders, enabling businesses to thrive and helping lenders to grow and help more clients. Loans classified under microfinance typically vary from $100 to $25,000. Many microfinance organizations offer additional services that traditional banks do not provide, such as financial education and credit-building programs.

History:

Versions of microfinance have been around for centuries. Modern microfinance, however, owes its recent popularity to Grameen Bank. Founded in Bangladesh by Muhammad Yunus in 1983, this Nobel Prize winning institution now has more than two thousand branches, 8.81 million borrowers, and boasts a repayment rate higher than 99%. Microfinance has evolved to take many forms: some organizations are local, operating in one city or metropolitan area. Others hone in on one country: members of Forbes’ list of top 50 global microfinance institutions hail from places as diverse as Colombia, Bosnia and Herzegovina, Mongolia, Morocco, and Albania. Still other organizations operate globally and utilize varying strategies to target clients. Kiva has an online crowdfunding platform, and Accion International supports global microfinance institutions by providing them with technical assistance, debt and equity investment, and training.

Many microfinance organizations, including Grameen Bank, focus on lending to women. ProMujer, an organization that lends to women in Latin America, offers women access to quality health-care and preventative health education services. Especially in rural areas and in developing countries, women are considered both an untapped labor force and reliable borrowers. When coupled with educational services, microfinance can enable women to earn extra income and support their families.

Where HMFI Fits In:

HMFI disburses loans ranging from $500 to $10,000 with a fixed low interest rate of 6%. The organization was founded with inspiration from newly established microfinance lenders in the United States and an understanding that a lack of alternative financial resources is not unique to developing countries. The DC metro area ranks consistently as one of the most underbanked regions of the US. HMFI not only offers reliable access to capital for clients to grow their businesses, but also a committed partnership. Our internal structure, comprised of five departments, ensures that HMFI is invested in serving clients, raising funds, and financing loans. We offer financial coaching sessions with five modules that cover a range of topics from saving strategies to building a credit score. In the large world of microfinance, HMFI strives to make a difference in the DC metro community.

 

Sources:

http://www.grameen.com/introduction/

https://www.forbes.com/2007/12/20/microfinance-philanthropy-credit-biz-cz_ms_1220microfinance_table.html

https://promujer.org/get-know-us/

http://www.accion.org/what-we-do

 

New Partnerships and First Financial Coaching Session of Fall 2017

This year, HMFI has forged new partnerships with the Arlington Partnership for Affordable Housing (APAH) and Carlos Rosario Public Charter Schools to hold our Group Financial Coaching services. APAH strives to develop and preserve affordable, quality rental communities for individuals and families earning between $20,000 and $60,000 per year. Consistent with its mission statement, APAH offers bilingual programs designed to help residents develop personal and financial stability.” Carlos Rosario has worked to empower tens of thousands of immigrants and provide award-winning education, life skills programs, and support services. We’re excited to be working with both organizations!

HMFI’s financial coaching program consists of five modules, each lasting approximately 30-45 minutes. The modules include before and after quizzes and interactive worksheets that allow clients to track their progress. Summary sheets are also provided for future reference. The most unique components of the program include the interactive format, personalized coaching style, tailored content, and overall comprehensiveness. On October 4th, financial coaches Ravisa Kalsi and Ridwan Meah kicked off the semester with the first session, the basics of banking. This module addresses the benefits of opening accounts at financial institutions, the differences between savings and checking accounts, the selection of a bank or credit union depending on  individual circumstances, and the specific steps to opening an account.

Ravisa Kalsi, Head of Group Financial Coaching, explains that one-on-one interactions with students motivate her to make continual improvements to the program. “HMFI’s financial coaching isn’t your average banking class. We take the time to understand the concerns of our students and tailor the content accordingly. While we emphasize the importance of the subject material itself, the discussions we foster with our clients at the end of each session are often most rewarding. We strive to impact as many members of the greater DC community as possible, and financial coaching is a great outlet to further that goal.”

Ridwan Meah emphasizes the value of basic financial literacy, in both the clients’ lives and his own. “I’ve found a lot of value in group financial coaching, both in developing the content and engaging with clients,” said Ridwan. “ The modules synthesize and clarify important financial knowledge; working to develop content improved my own knowledge of those topics and challenged me to present them succinctly and effectively. Working with clients has allowed me to see how we are helpful and how we could become more helpful.”

Alongside Ravisa and Ridwan, HMFI new hires Carina Franco and Joseph Deck will also be spearheading coaching sessions at the Arlington Partnership for Affordable Housing and Carlos Rosario Public Charter Schools. They are looking forward to another successful semester of group financial coaching.

 

If you’re interested in attending some of our modules, please reach out to Ravisa rkalsi@hilltopmfi.org.

Senior Spotlight: Patrick Brown

Patrick Brown started with HMFI in the spring of his freshman year and is now in his 6th semester with the organization. After completing the summer HMFI internship, Patrick became the head underwriter in the spring of his sophomore year and acted as the director for monitoring during his junior year. This spring Patrick will graduate with a double major in finance and accounting from the McDonough School of Business. I sat down with Patrick to get his thoughts on his history with HMFI.

Why did you originally join HMFI?

I originally joined HMFI because as a freshman in the business school I wanted to be a part of a business focused organization that helps real people overcome challenges beyond the scope of a college campus.

Give 3 words to describe the HMFI culture.

Entrepreneurial, inclusive, and team-oriented.

What’s one piece of advice that you would give to anybody who has just started with HMFI?

HMFI hired you all for a reason and the work that gets done is contingent on each and every member both doing the leg work and offering their own unique perspective. Never underestimate your own abilities and always be willing to ask for help.

Tell me about one memorable HMFI experience.

My most memorable HMFI experience would be doing the summer internship between my Freshman and Sophomore year and successfully disbursing our first loan to Yacine.

Which director scares you the most?

The monitoring director, Cara Bonanni.

What’s next?

In the near term I’ll be returning to Sagent Advisors to work in investment banking but after that who knows!

 

Client Spotlight: Aaron Gholson

We are excited to introduce our newest loan client, Aaron Gholson! He is the owner of ATA Transportation Services LLC, where he has been driving children in grades three through eight to school for the past two years. A loan from HMFI will enable Aaron replace and fix his buses to ensure that he will be able to pick up and drop off the children without delay. We conducted an interview with Aaron to gain some insight into his business and his experience with HMFI.

Q: Why did you decide to apply for a loan with HMFI?

A: I decided to apply for a loan with HMFI because I was seeking some financing so I could try to upgrade my equipment. It sounded like HMFI was a good opportunity for me to obtain a loan that I would otherwise would not have been able to obtain.

Q: How did you hear about HMFI?

A: When I decided that I needed to buy a new bus, I googled “finance help” and SBA’s finance seminar popped up. While I was at the seminar, I met one of your representatives. I took a picture of a couple of the Powerpoint slides during the presentation and later I called to ask for more information.

Q: Have you had a particularly memorable student or experience while driving the bus?

A: I have a few letters that the children have written me. There were some fifth graders that were giving me trouble on a regular basis, so I told them when they graduate from the eighth grade and move on to high school, I would give them those letters they wrote me as a graduation gift. That’s one of my favorite memories.

Q: What advice would you give another entrepreneur who wants to start their own business?

A: I would say “save your money. All of it.”

Q: What are your plans for the business in the future?

A: I definitely want to scale and get other contracts. I have a good client network right now and i’m trying to expand my client base. It’s been difficult finding access to capital, but if I had more I could go out to get five or six more contracts worth a good amount of money. It’s hard to build up the confidence to offer my services. With the contract I have right now, I asked for some money up front and I was blessed when they agreed to give me some money up front

 

All of us at HMFI are pleased to be working with Aaron and look forward to what the future has in store for his business.