FIELD Scale Academy: Justine Petersen

Justine Petersen

Scale-up Strategy:

Three key strategies Expand lending through partnerships with local banking institutions.
Modeled after ACCION New Mexico’s partnership program.
Expand into emerging markets.
Primary focus on the Latino and refugee populations.
Build organizational capacity to attract a donor base.
JP has grown to date largely through fee-for-service contracts such as the SBA Microloan program. It needs to create a more diversified source of both capital and operating funds, in order to tap potential growth in its region.
Progress Update as of May 2008: Justine Petersen worked extensively on diversifying its source of capital through an increased organizational capacity for fund-raising.
Through a consultant, conducted a development assessment of the organization’s capacity to engage in fund-raising activities. Worked with a strategic communications firm to rebrand Justine Petersen, launch a new Web site, and design new materials (e.g., letterhead and business cards). Worked with a public relations firm to produce a public relations plan and provide public relations on retainer. As a result, Justine Petersen has received notable coverage in area newspapers, radio and television, as well as presence at events. Contracted a consultant to train board members on roles, responsibilities and fund-raising.
The organization also focused on efforts to expand into emerging markets.
Developed and expanded relationships within the Hispanic community and hired a bilingual loan counselor. Re-hired a former employee on a part-time basis to develop relationships in an African American neighborhood. Staff developed an “Emerging Markets Business Plan” and broadened the target market in light of another organization moving into the immigrant/refugee communities.
Background: Founded in 1997, Justine Petersen provides microenterprise, IDA and housing assistance services in its work to assist low-income residents in the region.

Core Microenterprise Services:

Microenterprise loans
One-on-one counseling for potential borrowers
IDAs
Financial literacy training using the FDIC’s Money Smart curriculum

Highlights:

One of only a few SBA microlenders to successfully double (twice) as part of the Association for Enterprise Opportunity (AEO) Double or Die campaign.
Cross-selling of products between housing and microenterprise customers has helped to increase scale.
Targeted neighborhood marketing (including block walking) and a gap financing product have helped to expand scale and market penetration; on one block JP has 13 microborrowers.
Expanded staff capacity: JP has hired a loan fund manager and compliance manager to build capacity for future growth.

Current Scale:	Scale Projections:
FY2005: 171 clients and 92 microloans	FY2008: 415 clients and 300 microloans
FY2006: 315 clients and 171 microloans	FY2009: 440 microloans
FY2007: 396 clients and 230 microloans	FY2010: 570 loans originated; outstanding portfolio of $6.7

Learning Questions:
Efficiency: What can JP learn from other high-volume lenders in the group about how to build the infrastructure and staff capacity to support future growth in an efficient manner?

Risk-based pricing: How have other lenders approached risk-based pricing, and what have they learned?

Capitalization of loan fund: What sources of capital have other grantees used to expand their loan fund? What are the types of relationships they have created with investors?