Ka Wai Ola - Office of Hawaiian Affairs, Volume 11, Number 6, 1 June 1994 — Loan board OKs microloan demonstration project [ARTICLE+ILLUSTRATION]

Loan board OKs microloan demonstration project

by Patrick Johnston Microloans - loans for individuals to start up or improve small businesses - are becoming increasingly popular across the country and recently have been getting attention in Hawai'i. Last month, the Native Hawaiian Revolving Loan Fund board approved the creation of a microloan test piloī project. The loan product will provide funding

for qualified participants of the recent aquaculture workshops (see Ka Wai Ola, March issue) who wish to start their own backyard aquaculture operations. The aquaculture workshops were part of a project supported by OHA, the state Aquaculture Development Program, and the University of Hawai'i that taught participants the specifics of running a backyard aquaculture pro-

ject. The loans will be small - under $2000 - and will be used to buy tanks, seed stock, feed, and cover overhead costs. The hope is that aquaculture farmers will be able to pay off the loan with revenues from their first crop of fish. To be eligible, applicants must satisfy the same qualifications as other Native Hawaiian Revolving Loan Fund applicants, have participated in the aquaculture workshops, and be part of one of the hui (cooperatives) created by workshop participants.

Creating a business plan - a key part of applying for a OHA loan - will be required, but because the loans will be mueh smaller, less documentation will be needed. Also, the loan fund applicant will be required to have been rejected twice by a financial institution for a personal loan or line of credit, as opposed to a business loan, whieh is generally mueh larger. Eeonomie Development staff stress that this is just a limited pilot, and is part of the regular

Native Hawaiian Revolving Loan Fund program - not a new loan program. "One of the reasons we're testing," explains eeonomie development specialist Chris van Bergeijk, "is that we want to get rid of any problems before going on a big scale. ... It is easier to sell an idea if you've actually tried it." To turn this into a regular loan program a number of key issues would have to be addressed. These include determining how to staff the labor-intensive product, funding, the type of delivery system used, and whether the project would be funded exclusively by OHA or whether the agency would

bring in partners? "We've got a lot of homework to do," says van Bergeijk. If a permanent microloan fund was established in the future, loans could be used to start up small, home-based businesses like backyard aquaculture or toward upgrades in equipment to help small operations or self-employed entrepreneurs improve their productivity. The test product will be staffed by one of the loan fund officers who will work with one of the eeonomie development specialists. It is anticipated that there will be a maximum of 25 loan applications offered during the trial period.

Anyone interested in getting more information on the aquaculture project should eontact the hui on the island where they live. These hui are: Big Island: Aqua Hui Hawai'i Cooperative. P.O. Box 1060, Kamuela, HI 96743 885-8862 Kaua'i: Kaua'i Aqua Farms, 3473 Lawailoa Lane, Kōloa, HI

96756 332-7988 O'ahu: Hui Mālama, 41-1016 Waikupanaha Street, Waimānalo, HI 96795 259-7608 Maui: Hui 'Ohana P.O. 68. Hana. HI. 96713 Moloka'i: Moloka'i Aquaculture Hui, P.O. box 368, Ho'olehua, HI 96729 Lāna'i: Lāna'i Aquaculture Hui. P.O. Box 282. Lāna'i City, H1 96763

Aquaculture workshop participants inspect tank on Moioka'i.