Financing the Future
Hilltop Microfinance Initiative strives to help low-income businesses
Published: Friday, February 21, 2014
Updated: Monday, February 24, 2014 21:02
By constantly focusing on the difficult task of balancing academics and extracurricular activities, it can be easier to forget that there in fact exists a community beyond the university gates, a part of which doesn’t enjoy many of the opportunities students do. The Hilltop Microfinance Initiative, an organization facilitated by Georgetown students, addresses this neglect head on by actively empowering low-income entrepreneurs in and around D.C. who need fiscal assistance in order to start their businesses.
HMFI is independent from the university, meaning that it must seek financial backing from alternative sources.
“We have received grants from private funders, such as alumni donors,” CEO Chris Timko (SFS ’15) said.
“Our Credit Builder Program is mainly supported by Capital One.”
During the earlier years of its creation, HMFI issued loans to low-income individuals who needed a source of financing, but its leaders soon realized that the organization possessed the potential to do more.
“We encountered the great opportunity to make a tangible impact on others’ financial health. We could help individuals with not only lending money, but also with raising their credit scores,” former COO Alissa Orlando (SFS ’13), , said.
In early 2012, HMFI established its Credit Builder Program, funded by Capital One’s Investing for Good campaign. It provides inexpensive credit-building arrangements for individuals with low credit scores.
“People with low income have used a lot of credit but haven’t been able to pay it back,” Timko said. “It’s our job to open healthy lines of credit for them to increase their scores and allow them more access to the financial system as a whole.”
Through loan packages and personalized sessions, members of HMFI teach these clients how to develop long-term financial health. According to a recent survey issued by HMFI, 80 percent of its clients increased their credit scores within merely six months. Orlando, who served as COO for two years, emphasized the visible affects the Credit Builder Program can have on people’s lives. For this reason, the members of HMFI must be skilled and passionate workers who foster and promote the core values of social entrepreneurship.
“We are offering a product — a great product. Students involved understand that HMFI is not something slapped on a resume, but rather, it’s an organization that truly affects an individual’s financial health,” Orlando said. “If we don’t do our job correctly, it can have direct adverse effects on others’ financial standings. All the members recognize this. We all have to be wholeheartedly dedicated to the organization’s goals.”
HMFI also provides business consulting to encourage effective business practices, based on personalized needs. Clients can choose to receive help through a variety of practical sessions, including marketing, bookkeeping and business registration. The Business Consulting team’s ultimate goal is for clients to enter the sessions curious about how to resolve their financial issues and leave the meetings well equipped to tackle these problems. Fortunately, for those who cannot afford the generally set rates, HMFI can make adjustments based on the prospective client’s current financial situation.
Although the organization generally targets individuals with incomes no higher than 150 percent above the poverty line, the overall profile of its clientele varies greatly. Additionally, HMFI has collaborated with Empowered Women International. Guest speakers from HMFI held a session for women called “Building and/or Repairing Your Credit Score” that educated them on how to regulate their personal finances. In addition, HMFI has also worked with the Community Preservation and Development Corporation to target low-income housing areas.
A unique quality of the HMFI is that its board of directors entirely consists of alumni. All four of the founders, Alex Siegel (SFS ’10), Eugene Goldberg (MSB ’08), Max O’Neill (COL ’08) and Mo Narang (COL ’08) remain on the board as chair, vice chair, and directors. Alex Honjiyo (SFS ’13), who served as CEO for three years, now advises the executive staff as a director, although he currently works in Mexico.
“It’s a good thing to have former staff members on the board because it provides good institutional memory, and we’ve all been through similar challenges when we were once involved as students,” Honjiyo said.
The incorporation of alumni into the board of directors occurred organically, according to Honjiyo.