SMALL BUSINESSES AND ENTREPRENEURSHIP: A Project …

[Pages:88]SMALL BUSINESSES AND ENTREPRENEURSHIP: A MICROFINANCE PROJECT IN SANTA CLARA COUNTY

A Project Report Presented to

The Faculty of the Department of Anthropology San Jos? State University

In Partial Fulfillment of the Requirements for the Degree

Master of Arts

by Mayra S. Cerda

May 2011

? 2011 Mayra S. Cerda ALL RIGHTS RESERVED

SAN JOS? STATE UNIVERSITY The Undersigned Graduate Committee Approves the Project Report Titled

SMALL BUSINESSES AND ENTREPRENEURSHIP: A MICROFINANCE PROJECT IN SANTA CLARA COUNTY

by Mayra S. Cerda

APPROVED FOR THE DEPARTMENT OF ANTHROPOLOGY

_____________________________________________________________

Dr. Charles Darrah, Department of Anthropology

Date

_____________________________________________________________

Dr. J.A. English-Lueck, Department of Anthropology

Date

_____________________________________________________________

Dr. Roberto Gonzalez, Department of Anthropology

Date

ABSTRACT One of the biggest challenges that small businesses and immigrant entrepreneurs face is limited access to capital. U.S. microfinance organizations are trying to close this gap by targeting their financial products to those who do not qualify for a conventional banking loan. Opportunity Fund, a microfinance organization located in San Jos?, California, was trying to reach out to two categories of clients and identify potential partners in Alum Rock without having to use too much manpower. This report documents the anthropological methods I employed; a summary of my interviews and observations; my experience attending the first U.S. microfinance conference held at Stanford University; and the lessons I learned throughout the course of this project. I also discuss the opportunities for applied anthropologists in the field of microfinance and market research.

ACKNOWLEDGMENT I am truly indebted to my professor and advisor, Dr. Charles Darrah, for giving me the opportunity to lead this project. Much appreciation also goes to Dr. J.A. EnglishLueck and Dr. Roberto Gonzalez, for their friendship and assistance. This project would not have been possible without the help of my teammates and the community gatekeepers that gave me access to their organizations and clients. I am very fortunate to have parents who instilled in me the importance of education and hard work. Also, I am forever grateful to Seth D. Klinkhammer for his guidance and support throughout my educational journey at San Jos? State University; he has always played a significant role in my life and education. Lastly, I would like to dedicate this research project to the memory of two amazing men who taught me that perseverance is the key to accomplish your goals in life, Juan Manuel Papi Aguilar and Mr. Paul G. Klinkhammer.

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TABLE OF CONTENTS

I. Introduction .............................................................................................................. 1 II. Microfinance Programs Around the World .............................................................. 6 III. Getting to Know Opportunity Fund ........................................................................ 10 IV. Introduction of the Team ....................................................................................... 13 V. Project Overview ................................................................................................... 16 VI. Lessons Learned..................................................................................................... 67 VII. Opportunities and Future Applications .................................................................. 70 VIII. Conclusion ............................................................................................................. 72

Appendices A. Manpower Strategy/Check-in Meeting......................................................77 B. Opportunity Fund`s Loan Preparation Questions..........................................78 C. Diagram..........................................................................................79 D. Opportunity Fund`s Letter.....................................................................80

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LIST OF FIGURES 1. Identifying clients through community organizations....................................18 2. Alum Rock community next to Central San Jos?..........................................19 3. Opportunity Fund`s Ideal Client Profile Decision Tree....................................41 4. Strong and solid social capital between community organizations......................57

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LIST OF TABLES 1. List of community gatekeepers...............................................................31 2. Characteristics of Business Owners and Immigrant Entrepreneurs.....................33

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