As the head of one of the nation's largest microlenders, Gina Harman is leading the charge to expand the availability of credit to underserved communities in this country.
Just don't say she's helping poor people.
"It is true that microfinance is a means of lifting people out of poverty, but it, in and of itself, will not get the job done," Harman, the president and chief executive of the nonprofit microlender Accion USA, said in an interview last month. "My concern is that this rush of public awareness does not make us yesterday's fad. The American population can be a little fickle, so I don't want to be fashionable. I want to endure."
That concern has been heightened during the past few years, as more players entered the still-developing U.S. microfinance market, and the recession brought new obstacles — and opportunities — for microfinance specialists working with traditional lenders.
As the banking industry comes out of the recession, Harman has looked for ways to extend credit to entrepreneurs through partnerships with traditional lenders, others in the microfinance field and federal agencies like the Small Business Administration.
Harman joined Accion USA, an affiliate of the global nonprofit Accion International, as CEO in 2008. (She had been on the board of Accion New York and New Jersey, which became part of Accion USA, since 2001.) Previously, she worked for 23 years at her father's electronics company, Harman International Industries Inc. When she joined that company, shortly after it went public in 1985, she had only expected to work there a few years.
"The moment was right for me to leave," Harman said. As president of the consumer division, "I had managed a $600 million company, had benefitted from that financially, the company was about to begin a significant leadership transition and Accion New York needed a CEO. Seemed like the stars aligned."
From her New York office, Harman now oversees part of the Accion network of state offices and licensees, which have offered more than $272 million in loans to 30,000 small businesses over the past 20 years.
In an interview last month, she gave a frank and nuanced assessment of the microfinance industry in the U.S., which is underdeveloped by international standards — and somewhat splintered in how it markets itself to potential customers and partners.
While some pedigreed new microfinance specialists have lent mainstream buzz to the U.S. industry, many of them still use the rhetoric of fighting poverty, which Harman said she and her Accion colleagues are "quite conscious" about avoiding.
"I think if we cast ourselves in the language of, 'We solve poverty,' we become part of the big universe of antipoverty fighters, without a big, systematic, programmatic way of describing how we do so," she said. "If microfinance is the answer to every question, we're going to answer no questions — and that's why I want to stay focused on small business."
Prominent microfinance specialists like Grameen America Inc. and Kiva Microfunds generally offer smaller amounts, often to lower-income consumers, than Accion, and they market the loans as helping to "alleviate poverty."
"We compete for share of mind, but we don't compete for clients," is how Harman describes the relationship between Accion and Grameen, which has opened two U.S. offices since 2008. (Despite its short history, Grameen's ties with its namesake in Bangladesh — a microfinance trailblazer and Nobel Peace Prize laureate — has garnered it much attention.)
"We speak to different elements of a very similar community," Harman said. "In the best of all possible worlds, the Grameen graduates should be eligible for a feeder stream to Accion."
Stephen Vogel, Grameen America's CEO, said by e-mail that it "focuses on providing small loans to people living at or below the poverty line. … Accion is an excellent next source of capital for our borrowers and their businesses."
Even when Accion partners with other microfinance organizations, mixed messages can complicate business for both parties.
Accion has a partnership with Kiva, which posts photographs and profiles of microloan recipients on its Web site and then solicits contributions for what Kiva calls "lending to alleviate poverty."
Harman, while praising Kiva for being "masterful players in social media" and "a marketing machine," also called the partnership "an interesting learning experience" for Accion.
"As close as we are to our clients, we didn't anticipate that somebody might not want to be on the Kiva Web site, because Kiva says they're serving the poorest of the poor, and our clients don't want to be identified as the poorest of the poor," she said. "We had clients saying, 'We'd love to help you out, but I don't want my picture up there with a big sign over my head saying, "I'm poor." ' "
Premal Shah, Kiva's president, acknowledged "a good, healthy tension" between the language of poverty and that of small business, especially as Kiva facilitates lending domestically and abroad.