Nusenda presents success-driven case for co-op capital
“Through the Integration Initiative we’ve learned that there are a number of barriers to access capital. Even with the existing alternative support systems and programs there are folks contributing to our economy who still can’t access funds to grow or sustain their businesses. That’s something we need to change.” Robin Brulé, Chief Executive Strategist, Albuquerque Living Cities Integration Initiative
Late last month, Robin Brulé of Albuquerque’s Living Cities Integration Initiative, Frank Mirabal, Director of Collective Impact at the Mayor’s Office, and Jennifer Riordan, AVP of Community Relations at Wells Fargo Bank presented to 50+ investors at the Federal Reserve Bank of Kansas City’s Investment Connection event. The three Albuquerque Living Cities Integration Initiative members pitched funders on Nusenda’s Co-op Capital model, which has been recognized internationally by the likes of BAI-Infosys Finacle as an alternative lending model that can make big contributions to job growth and economic mobility.
In true shark tank format, Investment Connection brought nine New Mexico nonprofits together to compete for funding with only ten minutes to pitch their program and another ten minutes of Q&A. Co-op Capital had to take a condensed form, which provided a true “what you need to know” brief about the lending model. For those who are unfamiliar with the gist of it, read on to keep abreast of the conversation.
Co-op Capital sprouted out of a partnership with La Montañita Co-op, New Mexico’s largest community-owned natural foods market. La Montañita approached Nusenda to find a solution to their farmers’ lack of access to capital. Many growers in La Montañita’s network didn’t meet traditional loan requirements (collateral/credit), and couldn’t access the funding they needed to increase production and grow their businesses. In response to the challenges faced by local growers, Nusenda and La Montañita piloted a multi-stage borrowing tool that flipped the traditional loan model on its head; Nusenda provided funds to La Montañita, which were collateralized and loaned to individuals directly by La Montañita. This structure—which has now been deployed by numerous partner organizations totaling over $438,000 of investment in New Mexico—allows borrowers to apply for loans through a trusted organization rather than a financial institution, which in turn enables loans to be based on character, trust, and relationship rather than a credit report or collateral. Nusenda has collected five years of data so far, which demonstrate a default rate of less than 1% across the board. This model is one of Albuquerque’s many creative approaches to growing our economy in new ways.
CONNECT THE DOTS
COMMONALITIES with the Albuquerque Living Cities Integration Initiative: Co-op Capital contributes to the job growth and economic mobility we seek through our Integration Initiative.
OPPORTUNITY: This pitch requested a $280,000 grant to expand Co-Op Capital to incubators, accelerators, and skill-building organizations as new access points.