Microloans and Microfinancing in Action

Welcome To The Ecosystem

SPEAKER_02 0:02

Hello, my name is Yesika Oigain. Welcome to The Wealth We Build, a show that uplifts the voices of community leaders, entrepreneurs, organizers, and institutional champions who are taking bold collective action to close the racial wealth gap. The Metro Denver community is building something special. A connected, values-driven ecosystem where organizations that serve entrepreneurs are coming together to collaborate, share resources, and create greater impact. That ecosystem is the Colorado Entrepreneurship Coalition, or CEC. CEC works to strengthen collaboration across Colorado's entrepreneurial ecosystem, advance policies that support underrepresented entrepreneurs and small businesses, and address the systemic barriers that limit opportunity. Together, CEC partners are helping entrepreneurs build stronger businesses, create sustainable wealth, and thrive for generations.

What Community Wealth Means

SPEAKER_02 1:05

Today, I'm joined by Jessica Sveen, the CEO of Rocky Mountain Microfinance Institute, or RMMFI, one of our partners in the ecosystem. Welcome, Jessica. Thank you so much for being here. We're really excited. Before we jump into the great work that our RMMFI is doing, we would like to ask you what we ask all of our guests. What does community wealth mean to you?

SPEAKER_01 1:32

Community wealth to me is that everybody has the choice to activate the possible for themselves and their families and generations to come. And at RMMFI, we do that through entrepreneurship, that people have uh, like I said, the choice to do that and the pathway to do that and the accessibility to do that as well.

unknown 1:53

Yeah.

SPEAKER_02 1:53

And that's so critical, right? Because we we know that our communities thrive when we all thrive. And we know that entrepreneurs are part of this larger ecosystems that make our communities functional. Right. And so the role that our RMMFI plays is so critical, really, in building that sense of community and community wealth.

RMMFI Mission And Support Model

SPEAKER_02 2:16

And so tell me about the mission of RMMFI.

SPEAKER_01 2:19

Yeah, so at RMMFI, uh, you know, we believe that economic stability and mobility can be achieved by anybody, that uh entrepreneurship is for everyone, and that uh it is a tool that we can uh use for people to build that wealth for themselves and their families. Uh, we are a nonprofit and a community development financial institution or CDFI. So we do uh technical assistance, so really supporting entrepreneurs holistically, and then we have the capital component where we can lend and do uh entrepreneur grants as well to advance businesses.

SPEAKER_02 2:54

Yeah, that's so exciting when you think about the the power of capital connected to the technical assistance is such a critical component for entrepreneurs. So let's talk about the power and the impact of the entrepreneur.

Micro-Entrepreneurship And Who It Serves

SPEAKER_01 3:07

Yeah.

SPEAKER_02 3:08

Your work focuses on micro entrepreneurship. So if you can first describe what is micro entrepreneurship and then why is this approach so important?

SPEAKER_01 3:16

Yeah, so ArmaFI is really at the beginning of the entrepreneur journey through Colorado. It is uh for the person that has one idea or a hundred ideas, but really wants to take something, maybe like a side gig or a side hustle, and uh create it as a solid income stream into kind of their overall, uh we say the whole paycheck or their kind of overall kind of family wealth or the individual wealth. Uh 100% of our entrepreneurs are low income, so that's 80% and below the area immediate income. That's the only qualifier to get into our program, uh, really looking at that niche person and those niche communities or those larger communities that have been uh historically and presently shut out uh from uh traditional capital access to uh MBA programs, or all these things that entrepreneurs believe they need in order to start a business. And we kind of we recognize those those barriers and actively kind of remove them or take them down as much as we can from a system level to really open the pathway for entrepreneurs to really believe that they can step through and and start something for themselves. Uh a lot of our entrepreneurs are that micro entrepreneur, it's that solopreneur that uh has it's just themselves uh that's really growing. We got uh several entrepreneurs that hire people and things like that, but really at that beginning it could be that one person uh that is really looking to kind of build that themselves. Wow.

SPEAKER_02 4:43

Tell me a little bit more about the entrepreneur, because I think, you know, when when we think about entrepreneurship, um, oftentimes I come across people who think about the uh that one individual that started in his parents' garage and has the resources. How does that compare to the entrepreneurs that you work with?

SPEAKER_01 5:03

Yeah, so a lot of our entrepreneurs are working one job or three jobs. Uh they don't have the generational wealth to like unlock something or launching point. A lot of our entrepreneurs don't have their family support uh or their community support. Uh entrepreneurship is seen as very risky uh for a lot of communities, but also at this at the flip end, it's essential for a lot of communities to build in. Um 80% of our entrepreneurs are people of color, 75% are women, 25% are rural outside of Denver Metro, and about 15% are formally incarcerated folks. And so really folk, Arm Fire just really zeroes in on communities with arguably the highest barriers to uh traditional kind of entrepreneurship systems. Wow.

Why Capital Access Breaks Down

SPEAKER_02 5:51

So let's get into the biggest barriers that entrepreneurs that you serve currently face. Um let's talk about capital first, because as we talk about, entrepreneurs don't necessarily come from wealth that they can tap into their friends' family network. And so tell me a little bit more about it.

SPEAKER_01 6:09

Yeah, so it's pretty impossible, I think, for anyone to walk into a bank and get a business loan these days. Uh, but our entrepreneurs uh absolutely have problems accessing kind of capital from uh banking institutions and also city programs, state programs. A lot of those programs are aimed at entrepreneurs that have a certain level of revenue, that have been business for two plus years, really outside of that, um, like how do entrepreneurs get there and how do you really start there? So if you don't have the kind of the family support or kind of your own savings to kind of start your business, it's gonna take a while to build the revenue limits to that, like maybe traditional uh banking and or uh government funding can really support that.

Character-Based Lending And Business Coaching

SPEAKER_01 6:58

And so we really focus on what we consider character-based lending. Um, Armify's philosophy is like building capacity and meeting it with capital investment. You need money to start a business, like at the end of the day, like and to really kind of get going. And so uh our program is uh designed so that entrepreneurs, once they're in, we are getting to know them, understanding who they are, why they are starting their business, what their passion is, where do they want to take their business? And then we have multiple levels of programming from kind of like that idea, let's test something, to more of like a traditional kind of accelerator 12-week program. Entrepreneurs are supported through mentorship, through the entire process, and then also our staff, uh, so that when they are finished with our boot camp, our second program, uh we've gotten to know them. We understand kind of where they're at, like I said, and they have a business plan that is activated. And by activated, I mean, you know, entrepreneurs, I mean, at 2026, you can type something into Claude or Chat GPT and get a business plan right there. But our program is really focused on like how do you speak about your financials, your operational cycle, your marketing, your management in a way that makes sense to you, that you don't have any areas of your business that you don't know. Our entrepreneurs are uh 100% in kind of the operational space. A lot of them have decades of experience in doing what they're doing. And now they're like, I want to do this on my own, or I want to build something for myself. Uh and so we are like, you have all the expertise, like you are the CEO of your business. Like, how do we look at you as uh and and support you as we call the whole entrepreneur? That we have the person is only as I'm sorry, the business is only as successful as the person behind it. So that's the way we approach capital is really understanding the person and and who they are. Um, because a lot of times with entrepreneur spirit, like it could be this business, it could be something else. They can run this business for a couple of years, or they might have multiple things going on. It's just that the entrepreneurial energy is like creating something to solve a problem that they see in their community. So our capital products are designed to uh meet that.

Low-Interest Microloans And First Purchases

SPEAKER_01 9:18

Uh we kind of push barriers of that, uh, of kind of traditional capital by setting our own interest rate. We have a 5% interest rate, which is well below uh kind of national prime. Uh we do lending between uh $500 and $75,000. So really playing in that micro space with our average loan around $3,500. And that is really like what do you need to have in place to start making money tomorrow? Is it the market booth? Is it a 3D printer? Is it a website to you know start selling and really kind of activating that?

SPEAKER_02 9:53

Wow, that's pretty exciting because when you think about being able to access capital to actually leverage the opportunity, the skill that you have to make money is so critical. And yet I I recently read a study that the majority of our population couldn't cover a $500 emergency. And so when you think about the power of being able to access capital, $500, $3,500 to actually get you to that level where you can create security is significant for our entrepreneurs.

SPEAKER_01 10:26

Yeah, and it's very, you know, with the character-based lending approach and really understanding people, we uh we have flexible loan terms, we can do modifications if something comes up. All we ask our entrepreneurs is like, as we are building trust with you, you're building trust with us. And it's a phone call, it's a uh, you know, tell us what's going on, tell us all the things that you're going to do. People have emergency medical situations, I mean emergency whatever situations, and we can work with you on that because we want you to be successful. Uh, we are not interested in providing community debt uh just to provide debt. And one of the number one things entrepreneurs come to us for is capital. And I think through our capacity building programs, it really helps entrepreneurs see what is it that you actually need. You might not need a full-blown restaurant. Like, let's start with catering, and then that builds to a food truck that builds to, or you know, that builds to restaurant or whatever. It's like, how do we have kind of the slow growth approach so that you can really support the the capital access you need, the loan payments, your whole kind of financial support is you know, built over

Slow Growth And Minimum Viable Steps

SPEAKER_01 11:37

time.

SPEAKER_02 11:37

Yeah. I love the idea of let's test minimum, minimum viable product and then figure out how we get to that next level, right? I think oftentimes uh we we see entrepreneurs who want the really big dream and and it's great to have that, and it almost feels impossible to go from nothing to a full-blown restaurant. And so, like, what are the steps to get there? So I love that you all are providing the technical assistance, the support. Um does does um capital, character-based capital work without the relationship? I don't think so. Yeah, yeah, it's so critical.

SPEAKER_01 12:14

Yeah, it's so critical. And I think it's the like so much of the upfront work. You know, it's before they get into programming, it's even during programming, it's the years of support after, you know, we've been working in the community since 2008 uh from just like trusted partnerships and and showing up in places and really championing people on. Um, I saw a gentleman last night at a different organization, uh, entrepreneur support organization, graduate from their program. And he graduated from our program in 2014. And now he's kind of morphed his business that he graduated our boot camp with to uh this other business. And it was like, hey, we've been tracking with you for what was that, 12 years now? And you know, small businesses is a long game. And I uh we're not interested in the kind of flash like here's a workshop, here's a loan, see you later. We really want to see people build that wealth. I think that is also uh a component of kind of our definition of community wealth is like you build over time and you're with people through that, and uh really want to be supportive of that uh community

Trust Built Over Years

SPEAKER_01 13:21

as well.

SPEAKER_02 13:21

Yeah, and and I think one of the biggest uh lessons is that there's no silver bullet, right? Like this is hard work, this is building relationships and supporting entrepreneurs so that they can then take those steps. Uh there's no silver bullet for organizations, and there's definitely no silver bullet for the entrepreneurs either.

SPEAKER_01 13:40

Yeah, we do we uh do a lot of assessment of our entrepreneurs up front through conversation, through surveys, really understanding them, where we assess kind of business feasibility, like what's your idea? What do you know about your market? What do you have you done this before? All those things, personal stability, you know, like what is your home life like? Do you have the support of your family? Do you have another job? A lot of our entrepreneurs are working multiple jobs. Um and then also the last thing is entrepreneur spark. That's the grit. You know, not everybody is an entrepreneur at heart that kind of uh can really focus on what their why is. It doesn't matter what your business does or sells, is why you want to be an entrepreneur. What is it about business ownership that you believe is your path towards XYZ? And I think that's the like, that's the grit. That's the like we can keep doing this day over day, um day after day or week after week. And as soon as this is done, I can recreate something else, or kind of always are looking to solve the problems with business. So

Repayment Rates And Avoiding Predatory Debt

SPEAKER_01 14:42

love it.

SPEAKER_02 14:42

So I'm sure people are wondering about default rates. Um tell us what you've learned about default rates with character-based lending.

SPEAKER_01 14:51

So we have uh so we have an overall um uh I guess default or uh loan repayment rate is how we define it. It's of 94%. Wow. So way higher than the kind of national averages, even kind of local averages as well. And that comes through the trust based. Um we are also the one of the only, if not the only CDFI that are doing the small dollar loans. A lot of people start at that $10,000. Um, and so doing those kind of $3,000, $3,500 loans really to get somebody going is a lot more accessible for folks to take on if they wanted to like launch something or do something. Um so that 94% is something we're very uh proud of. Um, but that comes with a lot of work. You know, I have a 13-person team that really is supporting kind of our whole entrepreneurs, whole communities in that kind of in that work as well.

SPEAKER_02 15:52

Yeah, and that's again very critical. It's it's capital and it's that technical assistance that provides the support. When um I was really excited when I learned that you all have the $500 um loan available at 5%. Yeah. That just seems unheard of because what we were seeing with entrepreneurs is that they were going to predatory uh providers. And so I worked with uh one of our businesses, a cooperative, that had gotten a thousand dollar loan at 35%. Oh my god. And they thought that was a good deal because the alternative would have been a much higher. And so you think about their work going to who knows where. And so recognizing that with uh having access to that vet that very low uh level and low interest uh can be the game changer for a lot of our businesses.

SPEAKER_01 16:43

Yeah, and a lot of that $500 is the market feasibility or the testing of something. So uh some of our entrepreneurs that are very true startup, like I have an idea, I want to test it, maybe that $500 is like a booth rental at a market or something like that, where it's like, I just gotta like, I gotta start to get feedback, I gotta get this out there, I gotta see what people think, and then they can build it up over time. And so uh there's very few uh yeah, lending options or grant options to kind of do that. And so, how do you get it to test your product? How do you really get to get out there? And that's what we kind of focus on.

A 12-Year Success Story

SPEAKER_02 17:17

So tell me about an entrepreneur success story that inspires you or that you can share with our audience.

SPEAKER_01 17:23

Yeah, I mean, so I was talking about this gentleman. I was so I was I was judging this other organization's pitch contest, and I looked down and it was uh uh a guy that came through our program 12 years ago. So that was just like, and when he was doing his pitch, I told him afterwards, I said, you did a really, really good job. And I was like, I think you need to leave, lead your pitches with how much of a community leader you are. And um, and he is very, very humble and very vulnerable. And he's like, oh no, no, like I gotta put on this facade that I, you know, uh know everything and can do everything. And I'm like, everyone, your presentation was flawless in terms of what you know. But our our uh entrepreneurs are community leaders and they're they're leading through that. And it's yes, it's the expertise, but it's the presence in community. And so that was a it was just a really fun kind of full circle moment last night of just really supporting somebody through the long-term growth. I mean, most other maybe organizations wouldn't be tracking somebody for 12 years, you know, and seeing the success of multiple businesses that he's had. And he was like, Oh, I don't really want to bring up that other business and that other business. I'm like, you're still running that thing, and that is now like you've spun that off, or somebody else is managing that, like the growth of somebody and and also the ripple effect that that business in the last 12 years have has had on himself, his family, his children, and his community. And now he's like doing this like really cool housing uh business and to support people in transition and uh from justice community or just uh homeless services or whatever to really get stable. And that is when I think about our entrepreneurs, when they're they are solving problems in their community through business, they're identifying something that they're like, hey, I I can either start a business that can solve this or my business can help this in a certain way. And that is like true success because businesses are then staying in community, wealth is staying in families and community, and the trust is being built and the economic uh power of communities uh kind of stay there.

SPEAKER_02 19:39

So yeah, I love the long-term tracking because I think that's oftentimes nonprofits have the one-year grant or the three-year grant. And so to make the commitment to say, we will track you for as long as we can to see the impact is just so powerful.

Ownership As Power And Choice

SPEAKER_01 19:57

So we like, I don't know what it was. Like a couple years ago, I maybe through the COVID situation, I was like, what are we really doing? You know, and and I was our mission was, you know, social economic ability for for all. And I was like, how do we know we're really doing that? And uh so we kind of we redesigned our theory of change, really focusing on ownership and how ownership brings power and power of choice. So going back to like just the mission of RMMFI is like, how do you increase ownership where somebody feels like they are uh have the agency has the power to make choices for themselves and their families. And so uh our theory of change really revolves around ownership of self, ownership of wealth, and ownership of community health. And that only is done through tracking long term, and it's not the like here, yeah, take this workshop, see it later, or here's you know, fifty thousand dollars or a million dollars and see it later. Like it is even those people that have take like we have an we have a woman that is taking her 25th loan with us. Wow. And our longest time borrower at her 25th loan, she's building over time, and like even that is a long-term relationship, and you see you watch success kind of grow over time, and uh yeah. I love

What A CDFI Does Differently

SPEAKER_01 21:17

it.

SPEAKER_02 21:17

So I'm curious for for our audience, it would be interesting to learn a little bit more about the concept of CDFI, um, community development financial institution. How does that different than a traditional bank or what is the opportunity? And also if you can talk a little bit about that journey, because it's not an easy um, it's not an easy entity to establish.

SPEAKER_01 21:41

Sure. Yeah, it's not, and it's becoming increasingly more difficult. Um so we it is a the CDFI is a um certification from the federal government, the Department of Treasury, that allows you to lend money to community. CDFIs were set up as being Kind of an intermediary between the bank and the community. So kind of like traditional wealth circles and things like that. And then the CDFI kind of and then traditional bank, the CDFI sits in between where we have the agency to set interest rates and also report credit and also build wealth and build financial stability over time as well. It is a hard, we've been a CDFI since 2010. You have to reapply every single year. Then the CDFI fund has additional resources for technical assistance grants and lending capital to be able to get out and return. The last couple years has been very difficult from the federal government, a lot of much more restriction. The future of the CDFI is unknown from a national level. And so that is how a lot of our CDFI partners internal, like in state and Colorado, are trying to do something together to really kind of support long-term. But I think CDFIs are critical to both small business and housing. You can either be a small business CDFI or a housing CDFI because they have the more accessible capital and the mechanisms to track lending. Some organizations that support entrepreneurs that don't do the capital component, they're like, oh, it should be easy just to like get a loan fund and we're just lending money. And it's like, you don't want to play that game, like the borrower, borrow the, you know, lender-borrower relationship always with community, unless there's like uh even just the the rewards on the borrower side of uh we report credit, we help people build credit, uh people have zero credit or you know invisible credit, and we're we're helping people kind of build that as well. So it's a lot of work, um, but I think it's essential to really kind of starting something.

unknown 23:51

Yeah.

SPEAKER_02 23:51

As a community partner, I'm incredibly grateful that you all took on that challenge. So we can say, let's go talk to our MMFI. And so as part of this, um, you know, when you think about it, you mentioned it doesn't have to be the everybody has to be doing the same thing. And so tell me a little bit more about how you envision this ecosystem and collaboration impacting Metro Denver.

Building A Seamless Entrepreneur Journey

SPEAKER_01 24:17

I know, and I love when we get to talk about this because we do so much work together. Um I see the larger picture of what does the entrepreneur journey look like in Colorado from that person, that one person that has one idea or a hundred ideas, like I mentioned, all the way through launching a business, growing their business, uh doing whatever kind of program to maybe owning real estate on 16th Street Mall. And you see kind of that long span that could take one year, 10 years, right? But it's the journey of the entrepreneur. And what is amazing about entrepreneurship and amazing about an ecosystem of partners is that it really puts the entrepreneur again at the center of the equation because you want entrepreneurs to be as agnostic as possible because you want them to get the resources they need when they need it. And so I think from an ecosystem perspective, we have a lot of um responsibility to really support that journey where the entrepreneur sees kind of zero disruption in their dream, and that all the partners and all the organizations can kind of be along the journey where the entrepreneur can then decide, again, with the agency of power, you know, um, agency of choice, to decide what they need when they need it to like get them to the next space. Uh when it's it's our it's I think it's a large responsibility for us to be coordinated, be connected, um, because if the entrepreneur is confused and delayed in their dreams, then we're not doing the our job as an ecosystem and being collaborative and together.

SPEAKER_02 25:58

Yeah. And just in the way that we encourage our entrepreneurs to focus on what they do best, this is a really good opportunity for us as organizations to focus on what we do best, right? And so as uh resources continue to shrink, how do we become much more efficient at providing the services that we provide while we're building collaborations? So I'm really excited about this and figuring out ways to continue to work together because there's so much opportunity there.

How To Get Involved And Volunteer

SPEAKER_02 26:27

Um so how do people engage in your work?

SPEAKER_01 26:31

Um call me up now. So you can uh engage our work through our website, um uh just www.rmmfi.org. It takes a while to do the acronym fast. I know I believe that. Um uh reach at us through social media, LinkedIn, all the things. Um, if you're an entrepreneur, we have uh what we call a dream survey that really just helps us kind of understand as you're coming in, kind of who you are and what your idea is or what your established business is. We are always looking for volunteer support. Again, that mentorship component of really supporting entrepreneurs through our journey, uh, that's on our website as well. Um and as a nonprofit CEO, I would never, I'll always ask if you want to have you have access cash always. Uh we do uh take that as well. And so there's a place to donate and our partner, um, and also areas where you can buy from our entrepreneurs. I think that the you know, the power of your dollars is essential too in really making the kind of local economy uh supported is kind of being conscious of where your dollars are going. And so we have, along with ourselves and other organizations too, like are really trying to promote our entrepreneurs. So you're always like thinking, how do I better support kind of local business?

SPEAKER_02 27:46

Yeah. What's a good example of how you and other partners are supporting businesses to increase more exposure? Well, Shop BIPOC. Yes.

SPEAKER_01 27:57

Another co-founded organization along with the CEC is Shop BIPOC and uh creating a massive website of uh businesses that you can search for. I mean, how many businesses do we have on there? Almost 800. 800. And so uh we're always promoting that through a website, through social media, through tabling and events, and uh but a very easy way for for anybody to find all sorts of entrepreneurs on there.

SPEAKER_02 28:22

Yeah, so shopbypuck.com, definitely visit that. Jessica, it's been such a wonderful conversation. Thank you so much for uh the opportunity to engage with us and share about RMMFI. Um, the one last question that I have for you is volunteers. You are one of the few organizations that actively recruits volunteers. So in the limited time that we have, can you tell us a little bit about it?

SPEAKER_01 28:48

Yes. Uh we are always in need of volunteers uh with that mentorship component, uh really looking at people that have owned businesses, our business owners, um, have had lived experience, life experience similar to our entrepreneurs, uh, that have financial backgrounds, that are expertise in certain areas of business like marketing or um uh, like I said, finances or operations cycles or whatever to really support that entrepreneur. We have several opportunities that are uh, I would say low, uh low time commitment, like maybe a day uh to sit on a launch panel, which is kind of watch our hearing entrepreneurs kind of final uh pitch for their business plan, all the way to like a 12-week kind of commitment where you're meeting with entrepreneurs once a week. Um, I will promote the boot camp in terms of if you really want to see what it is like to support somebody in starting from uh like an idea or um an existing business and really support an entrepreneur through that. It's a really, really good opportunity to see how do you like build a business that is uh successful? How do you get to know somebody? How do you get to uh meet their families, meet like you know, and under really understand somebody. And so Arm MI is something that I love about our organization is we're trying to continually create space for communities to come together and support each other. So a true kind of just community look at business and create those spaces where people can meet and maybe wouldn't have met in other like natural cycles.

SPEAKER_02 30:20

So many opportunities to engage. So Jessica, again, thank you so much for being here today and thank you for the deep partnership collaboration. I know it's not always easy, but just want you to know that I truly appreciate you.

Where To Find More Resources

SPEAKER_02 30:34

And thank you for tuning in today for more information on Center for Community Wealth, including our free services for entrepreneurs, small businesses, cooperatives, and community-owned and benefiting real estate projects. Please visit our website, communitywealth.org, or find us on social media, CCW Denver on Instagram and Facebook, and CCWB on LinkedIn. Thank you for being here.

SPEAKER_00 30:58

The Wealth We Build is produced by Center for Community Wealth and hosted by Jessica Olgeen. This episode's special guest was Jessica Sveen from Rocky Mountain Microfinance Institute. This episode was directed, produced, and edited by Julie Jackson, with crew and teleprompter support from Joel Newton. Music and graphics by Motion Array with theme song Ply a Trip by Diego Martinez. Special thanks to Patrick Jackson and Center for Community Wealth Board of Directors, Asia Dorsey, Kay Vaughn, Kalatbari Limaki, C. Shanahan. For more information, visit our website, communitywealth.org, filmed and recorded at Denver Community Media. All rights reserved.

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