Aspen Institute and Citi to Study Innovative Credit Building Model for Entrepreneurs

September 28, 2011


Elaine Edgcomb
Director, FIELD
The Aspen Institute
David Roskin
Public Affairs





Citi Foundation Funds Aspen Institute to Test Use of Community Based Intermediaries to Help Low-Income Entrepreneurs Build Credit Through Financial Coaching and Secured Credit Cards

Washington, DC, September 28, 2011 –– The Aspen Institute announced today the launch of the Asset Building Through Credit pilot program, a research effort that will study a multi-dimensional approach to building credit and financial opportunities for aspiring low-income entrepreneurs.  The pilot program will study whether financial education and coaching combined with an innovative secured credit card platform can increase credit scores and expand the small businesses of more than 600 low-income entrepreneurs in five markets nationwide.  The study is funded by a $750,000 grant from the Citi Foundation.

In connection with the study, Aspen Institute’s FIELD program (Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination) is making grants to five nonprofit microenterprise organizations that will provide financial coaching and education, along with access to a secured credit card, to microentrepreneurs whose credit profiles need strengthening to qualify for business financing.  The Aspen Institute will also provide training, technical assistance, and a series of ongoing peer learning activities to support the pilot. A thorough evaluation and assessment of the program will determine if the approach is effective and scalable.

“One of the Citi Foundation’s core goals is to increase the number of sustainable microenterprises that generate new income and employment opportunities for low- to moderate-income individuals,” said Pamela Flaherty, President & CEO of the Citi Foundation. “Through our support of the Asset Building Through Credit program, we hope to analyze how community based intermediaries can advance that goal and drive widespread adoption of new approaches that will allow microentrepreneurs to obtain the financing they need to grow and succeed.”

In today’s economy, a good credit score is an important financial asset that allows small business owners to access resources and, in many instances, reduce operating costs. Over the past two years, high U.S. unemployment levels have led to an increase in the number of credit applications from individuals who are motivated to start their own businesses but whose damaged or thin credit histories make it challenging for even community-based nonprofit microlenders to provide loans.  Research has shown that the best way to expand financial capability and build (or rebuild) an individual’s credit score is to pair appropriate financial products with education and counseling.

The initiative is based on a successful program led by Justine PETERSEN, a St. Louis-based microlender that has been offering secured cards to its microenterprise clients for almost two years. Citi Microfinance has collaborated with the organization to develop its credit building model and technology platform.  Justine PETERSEN will play a key role in the Aspen Institute’s pilot project by advising the participating nonprofits on how to use secured cards as a financial coaching and credit building tool. 

“We know from conversations with microenterprise programs across the country that they are seeing increasing numbers of would-be entrepreneurs whose credit histories pose a challenge in building their businesses,” says Elaine Edgcomb, Director of the FIELD program at the Aspen Institute.  “This pilot will test a new approach that can help these entrepreneurs build their credit and their financial skills, and consequently increase their likelihood of business success.  If successful, we hope this is an approach that many of the other hundreds of microenterprise organizations in the U.S. can offer.”

The selected local partners each have longstanding experience in working with entrepreneurs, and in providing financial education and credit-building services to low-income individuals.  They include:

Champlain Valley Office of Economic Opportunity Inc. (CVOEO) and Central Vermont Community Action: These two Community Action Agencies serving rural Vermont each have over 20 years of experience teaching money management skills to the self-employed. Both agencies offer a wide range of credit- and asset-building services, including group training and individual coaching around credit, matched savings accounts, free tax preparation services, and credit clinics.

Latino Economic Development Corporation (LEDC): LEDC has provided business training and microloans to a largely-Hispanic client base in the Washington DC area (including N. Virginia and Maryland) since 1997. Over the past several years LEDC has embedded credit advising and coaching as a core element of its microenterprise programming, with a strong focus on one-on-one coaching.

Mission Economic Development Agency (MEDA): San Francisco-based MEDA has worked to assist low-to-moderate income Latino families for build assets since its inception in 1973.  MEDA’s Business Development Program provides comprehensive technical assistance and training services and incorporates financial education with a focus on savings, debt and credit. In 2010, MEDA developed a targeted financial education and credit coaching program that will support its efforts to offer secured cards to its customers.

Pacific Asian Consortium in Employment (PACE): with a long-standing history serving Pacific Asian and other diverse communities in Los Angeles county, the Business Development Center at PACE was founded in 1994. PACE’s Financial Education and Asset Building Program (FE/AB) has provided a wide variety of training and individual counseling targeted at building credit since 2003.

Women’s Brooklyn Enterprise Center (WBEC): Affiliated with the Local Development Corporation of East New York, WBEC has provided entrepreneurial and financial education and technical assistance to women and minorities in Brooklyn since 1988. In 2002, WBEC began providing one-on-one counseling and financial education in conjunction with its business training.

Microenterprises are small businesses requiring $50,000 or less in start-up capital and employing five or fewer people. The entrepreneurs targeted by microenterprise organizations tend to be women, minorities, immigrants, low-income and/or individuals with disabilities.  FIELD has been a leader in conducting research and providing funding aimed at driving innovation in the U.S. microenterprise field since 1998. Additional information about the pilot and the participating organizations is available at:

About the Aspen Institute

The Aspen Institute’s mission is twofold: to foster values-based leadership, encouraging individuals to reflect on the ideals and ideas that define a good society, and to provide a neutral and balanced venue for discussing and acting on critical issues. The Aspen Institute does this primarily in four ways: seminars, young-leader fellowships around the globe, policy programs, and public conferences and events. The Institute is based in Washington, DC; Aspen, Colorado; and on the Wye River on Maryland’s Eastern Shore. It also has an international network of partners.

About the Citi Foundation

The Citi Foundation is committed to the economic empowerment and financial inclusion of low- to moderate-income individuals and families in the communities where we work so that they can improve their standard of living. Globally, the Citi Foundation targets its strategic giving to priority focus areas: Microfinance, Enterprise Development, College Success, and Financial Capability and Asset Building. In the United States, the Citi Foundation also supports Neighborhood Revitalization programs. The Citi Foundation works with its partners in Microfinance, Enterprise Development, and Neighborhood Revitalization to support environmental programs and innovations. Additional information can be found at

About Citi

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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