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Mothers-turned-entrepreneurs benefit from microloan program

ENCINITAS — Wednesday nights Roselia Morales and five other low-income mothers gather at a Vista church to learn the nuts and bolts of entrepreneurship. 

Last week they learned about cost analysis from local businessman Allen McKay.

The women make handcrafted jewelry, bags and purses, which they’ve been selling through their network of family and friends. Now they want to expand to a bigger market, which they are doing through the six-month Microloans for Mothers.

The program was started by Cardiff resident Niels Lund who is best known for Class-ACT, a nonprofit he founded in 1998 that provides art instruction in schools. Last year Lund was the honored for his efforts as recipient of the Peacemaker Award from the Encinitas Rotary and, in 2010, the10 News Leadership Award.

A retired educator, he says it’s been a natural transition.

“I’ve always been involved in families and kids and imparting knowledge,” he said.

“Now I’m getting older and beginning to think about a legacy and want to be remembered as someone who has done some good both locally and around the world — because we have become global society.”

Since arriving in San Diego from Winnepeg, Canada, in the 1980s, Lund has been a teacher, a musical performer at the Wild Animal Park and founder of the San Diego International Children’s Festival. Cuts in arts programs in schools prompted him to start Class-Act.

In 2008, the organization started its global outreach component called the Children’s Global Art Exchange. A visit to school in Cambodia in 2009 became the catalyst for initiating the microlending program, Microloans for Mothers, when he met the mothers of the kids he was there to support.

“It sort of happened by accident in a way,” he explained. “I felt a real connection with them when I saw how poor they were and how hard they worked. We started researching lending programs around the world and how the concept started in the 1970s and grew from there.

“With every mother we’ve added to our Microloans for Mothers, I see a changed life and it gets better and better.”

The program was so successful that Lund decided to bring it home to San Diego. He began actively establishing connections with social service agencies and other organizations involved in the local microfinance industry.

Each client receives an initial loan of $250, which will be paid back over six months. The loan typically is used for supplies, permits and license fees to start a simple home-based business, but is mainly intended as a “practice loan” that builds credit history and acts as a learning tool for the clients. In the second six-month loan cycle a $500 loan is issued, and in the third cycle it would be $1,000. Repayment is done by installments at the weekly meetings in which each client also makes a deposit to their individual savings account.

At the core of the program is group training, which is used to empower clients with the skills to create a viable business plan with which to apply for a business loan from a reputable lending institution.

Training is provided in the areas of financial literacy, basic budgeting, product development and market research and communication — including help with designing marketing and promotion materials, and bringing a product to market.

In addition to selling to her network of family and friends today, Roselia Morales is selling her products at the Seaside Bazaar in Encinitas. Last week she and Lund made a presentation to the Mission Valley Rotary where she sold one purse.

She is happy with her success so far.

“I normally sell my bags only to individuals, but now I can also sell at events with the help I’m getting from the Microloans for Mothers program,” she said. “My dream is to successfully complete all three loan cycles in the program, and then, with that experience, be ready to apply for a real business loan at a bank.

“Also, I want to teach others how to make the bags so they, too, can have success like me.”

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