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| Bishal Kafle, MBA |
Bishal and CEDS aim to support entrepreneurs who are seeking to own or grow a business, develop assets, and empower themselves financially. CEDS is a Community Development Financial Institution and a micro-lender with the Small Business Administration, and works exclusively with low- to moderate-income Denver-area residents.
In this Q&A, Bishal discusses leveraging his business education and background in global microfinance to empower local entrepreneurs with the support and financing needed to turn their aspirations into reality.
What is your primary charge as Loan Officer at CEDS?
At CEDS, we provide two main services. One is microfinance support from $500 to $50,000; and the other is providing technical assistance – in the form of business consulting – in all areas of business, from procedures and processes, to business models, accounting, and more. This ensures the entrepreneurs have the right skills to best manage their business.
My primary responsibility as a Loan Officer is to work with loan applicants, to determine if they are ready to start their own business, which includes assessing the type of support that they need. For instance, I ask ‘do they have the required skills to start a business?’. If not, the next step is to determine how we can provide the right training for them to be successful.
As a Loan Officer I analyze growth strategy and marketing plan, I review their financial performance and create financial projections, and ultimately I make a funding recommendation to Loan Committee. CEDS recently started to manage a micro-lending program for a partner organization, Mi Casa Resource Center; and I manage this partnership. My role as Fund Manager entails servicing loans and providing unique support to entrepreneurs as needed.
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| Bishal with Mr. Mulu Hadgu, owner of a long-haul trucking business and Alexandria Wise, CEDS Executive Director. |
CEDS finds most of our new applicants through word-of-mouth referrals. We also outreach to different community groups, churches and mosques, and partner agencies to let them know who we are and what we can offer. Currently, CEDS has issued 124 loans totaling $1.8 million of investment into local businesses. Our clients are primarily immigrants and refugees, and come from more than 15 different countries including Bhutan, China, El Salvador, Eritrea, Ethiopia, Somalia, Sudan, and Vietnam.
CEDS will work with most sectors, and has already invested in food trucks, grocery stores, restaurants, long-haul trucking, auto collision repair, and more. CEDS is currently looking to diversify its portfolio’s sectors and client base to include other low to moderate communities. For this, I have been participating in various community outreach events and have been building partnership with new institutions.
What is your background and career path prior to your role at CEDS?
My work over the past few years has been centered on access to finance and building markets for entrepreneurs in Nepal. As a Nepali, I’ve primarily worked on development finance for the three years prior to graduate school.
In Nepal, one of the biggest challenges for entrepreneurs is access to affordable finance. People in farming communities lack high value collateral and banks aren’t willing to lending in rural villages. Thus farmers receive financing from market middlemen who charge high interest rates and don’t pay fair prices for produce. The company I worked for aimed to tackle this problem through wholesale lending and market development for the cooperatives. I brokered wholesale micro-finance lending – about $15,00 – between a commercial bank and a local cooperative that empowered 160 strawberry farmers to finance their own businesses.
Typically, majority of the Nepalese produce is exported to India as a low-value product, which in turn is processed in some manner to sell for higher margins. If the processing is done by the farmers, they would yield a higher margin themselves. Working with private businesses, community leaders, and non-profits, we created an intervention plan to provide local communities with a growth plan enabling them to add value on their own products.
In that capacity, I started exploring the U.S. market for Nepalese produce. Honestly, there were so many regulations, certifications, and processes that hindered me from truly understanding the U.S. market.
At that point I realized I should come to U.S. to understand markets, new practices and approaches, and build networks. I enrolled in the Colorado State University MBA program to learn about social entrepreneurship and business models to support people at the base of the pyramid.
With an interest in agriculture, I pursued my MBA capstone project with a coffee non-profit in Central America. I assisted Guatemalan organization in navigating the U.S. market and developing an outreach plan. Personally, it was a great opportunity for me to build my network, understand the agriculture markets in the US and Central America, and understand challenges of farmers half way around the world.
Upon graduation, I wanted to gain experience in the micro-finance industry that I could ultimately take back to Nepal. I was lucky enough to find a role at CEDS that allows me to learn about US micro-finance, and get the opportunity to contribute to the diverse community in Aurora.
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| Finalizing loan documents with Mr. Ibrahim Dabka, who runs a local tow trucking business. |
What are some of the common threads that connect the experiences of immigrant business owners?
Many of our clients, majority from the Middle East and Africa, are very entrepreneurial. They have already overcome many life challenges – conflict and persecution within their country, walking hundreds of miles to reach the safety of a refugee camp, and then living in that camps for 10 to 20 years. They come to the United States that has a new culture, new language, new system….basically a new everything!
But the grit and energy they possess and the entrepreneurial spirit they carry with them is the same or even more energized when they arrive in this land of opportunity. The commonality is they all want to thrive: they dream big and work hard!
In working with diverse communities, how does CEDS provide culturally sensitive services?
Having a diverse group of people working on our team, we’re able to manage cultural differences. I’m from a different religion and nationality from most of my clients. I have traveled to different countries, as have my colleagues. We are always patient and to understand the rich cultural diversity of our clients.
One of the thing I am really proud of at CEDS is that we provide “murabaha” financing for our Muslim clients. In Islam, it is forbidden to charge interest on loans within the Islamic faith. CEDS is one of the few – if not the only – Islamic debt compliant provider in the state of Colorado. Through murabahah financing, we provide fee-based loans where clients pay only a monthly administrative fee. Leveraging partnerships with banks, who typically can only provide interest-based loans, we can serve more Muslim clients, as banks will refer clients cannot serve to us.
What do you find most challenging in doing this work?
One of the biggest challenges for me is evaluating proposals for sectors in which I don’t have a lot of experience. Working in the United States is new to me and there many things about the market that I still need to learn. For an example, I didn’t know or understand the long-haul trucking business model, because I was never exposed to it before. Understanding a business model, in an entirely new, in a new business environment, and evaluating those proposal within a limited time has been challenging for me. To overcome this I spend as much time as possible discussing these business models with my co-workers thus gaining insight and understanding.
The beauty of this work is being in and among diverse communities. Every time I interact with a new applicant, I learn something new. As a financier, you may want to help everybody by providing loans, but it’s not always possible. Many of our clients are new to the country, and they don’t have the right skill set to immediately start a business. Providing those applicants with our opinion - that they’re not quite ready for a loan - is difficult for me. Although, I believe we are actually helping applicants more by requiring more experience and more business research. It’s painful to provide that reality check to applicants, but starting a business requires a lot of time and money. At times, it might be better to hear the truth earlier than later.
How does your cultural background impact the work that you do as a Loan Officer?
Being a native of Nepal, I am new to this country. Thus, I’ve faced culture shock, language barriers, and adapting challenges much like most of my clients. This experience has been one of my biggest advantages at CEDS because it has shaped my empathy and compassion towards my clients. I know where they are coming from and what challenges they have; and it makes me easier to identify their needs. As an international staff member, this is the one value I uniquely bring to CEDS.
Similarly, my experiences of travelling to different countries and interacting with different religions has taught me to be non-judgmental and not to stereotype anyone. More than that it has taught me the importance of diversity and the synergy it creates. Thus, I feel very fortunate to serve the community through my role at CEDS.
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| CEDS staff celebrating a community event with newcomers from Bhutan. |