A New Financial Tool for Microentrepreneurs

United Way launched microenterprise Individual Development Accounts (IDAs) together with several community partners in November 2000. This initiative builds on United Way's experience with homeownership IDAs. Low-income entrepreneurs who are participants in microenterprise development programs enroll to save regularly in an IDA and have their savings matched. The IDA may be used to purchase an asset needed to start or expand their business, such as equipment or inventory. The microenterprise development programs assist the IDA participants with setting savings goals, developing business plans and making their IDA business purchase. IDA participants attend 12 hours of economic education classes and receive one-on-one credit/debt repair counseling from Consumer Credit Counseling Services.

Why IDAs for Microenterprise Development?

	To expand the capacity of microenterprise development programs to build the businesses and the personal financial knowledge of low-income individuals.
	To assist microentrepreneurs in repairing credit and debt issues and increasing their financial management skills.
	To provide encouragement and incentives for microentrepreneurs to build savings habits and prepare thoroughly for a business asset purchase.

Sample IDA Purchases

	commercial grill - $1,000
	quilting machine - $3,000
	freezer - $400
	vehicle - $5,000
	lawn equipment - $600

Application and Eligibility
Before being considered for an IDA, a participant must first be enrolled one of the microenterprise development programs listed below and working toward the development of their business. The partner organizations select IDA participants from among their program participants. Household income must be under 200 percent of the federal poverty level when a person opens his or her IDA.

Current Status and Expected Results
More than 110 IDA participants have already capitalized their business through the IDA for Microenterprise program. There are 75 IDA participants currently saving.

For more information, please contact your nearest Microenterprise Development Partner (see list below) or Kagbare Rowland at 404.527.3549.

Microenterprise Development Partner:

Business NOW of Goodwill Industries of North Georgia, Heather Morrison, 404.728.8651

Financial Literacy and Budget Counseling Partner:
Consumer Credit Counseling Services

Bank Partner:
Wachovia