Frequently Asked Questions
- WHAT IS WASHINGTON CASH?
Washington Community Alliance for Self-Help (CASH) is a microenterprise development organization that provides women, people with disabilities, and other underserved individuals access to capital and business development training.
- WHAT DOES WASHINGTON CASH DO?
Washington CASH provides a business development training course, microcredit loans ranging from $500 to $5,000, technical business assistance, business consulting, and access to a peer support network that enables women (especially women currently dependent on public assistance), people with disabilities, and other underserved people to start or expand self-employment ventures.
- WHY DO YOU GIVE MOST OF YOUR LOANS TO WOMEN?
Two reasons. First, we feel that women are the most economically disadvantaged workers in our society, and therefore the most in need of business skills and capital resources. While the TANF (Temporary Assistance for Needy Families) program can serve as a vital safety net during a time of crisis, it can also trap women into taking low-paying, temporary, or unstable jobs. Second, it has been demonstrated around the world that women are better borrowers in that they repay loans at a much higher rate than men, and because they use their earnings to benefit their families first -- which in the long run also benefits the greater society as well. Currently, 81% of our clients are women.
- HOW DOES THIS PROGRAM WORK?
Groups of potential entrepreneurs join together to access four services: our business development training course; business loans of up to $5,000 (with initial loans of $500); post-credit technical assistance; and business consulting and mentorship from experienced community volunteers. Self-employment activities may be part-time or full-time, are generally home-based, and usually employ only the owner.
- WHAT IS THE INTEREST RATE CHARGED ON THE LOANS?
Our interest rate is currently PRIME + 4%, which is within the standard rate charged by other microcredit organizations who serve low-income and “high risk” borrowers. We do not require collateral for loans, nor do we deny lending services because of poor credit. We also do not charge for training sessions or loan processing. The interest income helps offset some of our training costs along with the costs associated with obtaining credit through banks and other financial institutions.
- WHY DO YOU FORM THE BORROWERS INTO GROUPS?
Because it has proven to be the single most effective tool for creating successful and sustainable businesses, since this interdependence serves to elevate everyone in the group. Experience in the developing world and in the U.S. has shown that peer support in the form of a lending group or circle dramatically stabilizes and improves repayment rates, and that groups work best when there are between five and eight members. New people can join the group only if they have completed the training course, have gained the approval of the group, and have shown their serious intent by attending all group meetings.
- WHAT HAPPENS IF SOMEONE DOESN’T REPAY?
If a member falls behind on their payments, the group will talk with the individual to find out exactly why the loan is past due and to determine what kind of extra support may be needed. Difficulties can often be worked out with some creative problem solving within the group. If necessary, groups can also access their Group Fund, which is money that group members put aside in case a member falls behind on payments. If problems persist, the group can remove an unreliable member if they so choose, but the outstanding loan must still be repaid before the group is eligible for more credit.
- WHAT TRAINING AND SUPPORT WILL YOU OFFER GROUPS?
Prospective borrowers first attend a series of nine business planning, motivation, and training sessions. These sessions cover the “business basics,” such as feasibility, marketing, bookkeeping, and more, and enable participants to complete a detailed business plan so that they can launch their venture with confidence. Once a business is underway, further consulting and support is provided by a Business Resource Network that is made up of Washington CASH staff, along with professionals from the local business community. These professional trainers are available to meet with participants at their biweekly workshops to discuss pressing and practical matters such as marketing, accounting, management issues, and many other details associated with running a business. In addition, a Mentor is assigned to each group to provide further guidance and support. Simply put, we want our clients to succeed and are willing to offer assistance whenever it is needed.