SOCIAL TOPICS (Archive): COMMUNITY DEVELOPMENT INVESTING

Published, March 1994

       This summer on the White House lawn, Tim Bazemore of Workers Owned Sewing Co. of Windsor, NC provided the overture to President Clinton’s announcement of legislation to capitalize community development financial institutions with close to $400 million.

       Speaking before an audience that included many of the Administration’s senior finance officials as well as community development activists, Bazemore described what happened when no bank would lend his rural Bertie County company the capital for purchasing inventory, cloth and supplies. “We turned to Self-Help, and that is when things started to happen,” he said. “They provided not only a means to borrow money, but they also provided technical assistance.”

       Based in Durham, NC, the Center for Community Self-Help is a statewide hybrid of a community development loan fund and a community development bank. The non-profit center was founded by Martin Eakes and Bonnie Wright in 1980 with the purpose of providing technical assistance in the establishment of worker owned businesses. Its model was the mondragon, Basque cooperatives in which a democratically structured credit source provides the glue of cooperative community development. Today Community Self-Help is an umbrella organization that receives grants and donations.

       State-chartered Self-Help Credit Union receives and pays interest on savings deposits now totaling over $400 million. Insured up to $100,000 by the federal Credit Union National Administration, Self-Help offers IRA’s, certificates of deposit and savings accounts but not checking.

       Self-Help Ventures Fund, an affiliated loan fund, typically provides down payments or equity on loans for community development in North Carolina. The fund accepts money from individuals and foundations willing to invest at above-average risk and often with below-market returns.

       Self-Help’s goal is the promotion of economic and social justice. To date it has loaned more than $50 million through its pioneering programs. By the end of 1993, Self Help had made 600 low income home purchase loans totaling $25 million, of which over 80% were to minority borrowers and over 60% were to single female heads of households.

       Since 1984, Self-Help has also provided more than $425 million in loans to over 600 small enterprises. The Center was a demonstration site for programs of the U.S. Departments of Housing and Urban Development and Health and Human Services, including the Job Opportunities for Low Income People program. It also served as the vehicle for the launch of the Small Business Administration’s microloan demonstration program. Childcare providers across the state, whose capital needs are small but critical, have been financed by Self-Help.

       As for Workers Owned Sewing Co., it has grown from being “unbankable” to employing over 60 full-time worker/owners, most of them women. Its annual sales are now over $3 million and its customers include major retailers like K-Mart.