Mara Bironic, NALCAB President and CEO
Provided by: NALCAB
One of the most stable ways to build wealth in a community is for residents to establish more small businesses. Unfortunately, the historical Catch-22 is that entrepreneurs from underserved communities have greater difficulty obtaining the capital needed to start their businesses. These barriers include, but are not limited to, lack of relationships with lenders, language barriers, and systemic discrimination.
To fill this void, organizations like the National Association of Latino Community Builders (NALCAB), a U.S. Treasury-certified CDFI, are mobilizing funding from private foundations, corporations, and federal agencies. NALCAB then works with a network of more than 200 members in all 50 states. DC and Puerto Rico are focused on small business lending and development to deploy capital where it is needed most.
As President and CEO of NALCAB, Mara Bironic is leading these efforts. I recently had the opportunity to speak with her about this work and the needs of Latinx business owners. The following is our conversation, edited for clarity.
Rhett Battle: Can you tell us about your professional journey and what inspired you to lead NALCAB?
Mara Bironick: The reason this work resonated with me is because I grew up in an economically unstable, single-parent household, but I also grew up in a very affluent community in the suburbs of Washington, DC. A community of “haves” have almost nothing and have unlimited economic wealth. I know firsthand the difference in opportunities, choices, and possibilities that financial security creates for individuals and families. When the economy becomes stable, people gain independence over their lives. Living paycheck to paycheck and balancing bills, rent, and variable expenses. Individuals and families are held hostage with every financial decision, a never-ending chess game of financial anxiety and stress. The opportunity to work in a field that can improve people’s financial situation and help them take ownership of the lives they want to live felt like the ultimate chance to make a difference. There’s a saying in Spanish: “El que no vive para servir, no sirve para vivir.” Roughly translated, this means, “Those who do not live to serve do not serve (function) in order to live.”
During graduate school, I had the opportunity to take a course called “Microfinance and Development” taught by Maria Otero, founder of Axion International, and Jim Boomgaard, CEO of DAI. This course gave me a deep dive into the history and impact of community-focused finance, and I was hooked. With the idea of working on international microfinance projects in mind, I took a job as a microloan specialist after graduating from the Latino Economic Development Center-LEDC in my hometown of Washington. Since then, my career has focused on international economic development and the U.S. economy, with a focus on Latinx communities in cities like New York, Washington DC, and Baltimore, and Latin American countries like my home country of Panama, El Salvador, Mexico, and Bolivia. I’ve been going back and forth between developments. My last job before joining NALCAB was a true full-circle moment as my first “real” job as CEO of LEDC led to leading the organization.
LEDC was and is a member of NALCAB, and I served on the board of NALCAB, so I have a good understanding of its operations and was very excited about the opportunity to lead it. During my tenure at LEDC, NALCAB has been a cornerstone of our growth as a partner and investor. Therefore, I know first-hand how NALCAB can help support and grow organizations. I also felt inspired to lead NALCAB because, although I have spent the first 20-plus years of my career working closely with small and medium-sized businesses, I have never personally run a business. Ta. So my understanding was conceptual. At NALCAB, as a Latinx-led organization serving primarily Latinx communities of color, we personally understand the full range of struggles, issues, challenges, and opportunities our members face. So I jumped at the chance.
Rhett Battle: Since your appointment, how have you furthered NALCAB’s mission to support Latino businesses?
Mara Bironic: NALCAB works closely with member organizations, including a large group focused on Latin American small business development and small business financing (approximately half of NALCAB’s 200-plus members). In 2021, we founded the National Alliance for Latino CDFI Executives (NALCE). This initiative provides specialized support to members who are lending in their communities, including small and medium-sized businesses.
NALCAB also works closely with federal agencies that develop and implement programs focused on supporting small businesses, such as the Small Business Administration and the CDFI Fund, where I was the first Latina to serve as a community advisory board member for the CDFI Fund. She was named chair of the committee, making her the second woman to hold this role in the foundation’s 30-year history. Our work with government agencies focuses on informing new and existing programs, and our advocacy and feedback always include the voices of NALCAB members implementing federal programs and products in the field. It is.
Finally, we will partner with corporate partners to bring small business members into cohorts that will receive a combination of pass-through grants and technical assistance from NALCAB. These cohorts also enable social capital and peer-to-peer learning between the organizations involved. This infrastructure support and funding increases the capacity of participating organizations to have a greater impact on the small businesses they serve in their communities.
Rhett Battle: What are the main obstacles Latino business owners face in securing capital, and how is NALCAB working to overcome these barriers?
Mara Bironic: Latinx business owners face multiple challenges in securing capital. These include lack of borrowing history (no or weak credit record), language barriers, systemic discrimination, citizenship status, etc. NALCAB works with organizations that primarily serve small businesses in Latinx communities of color and supports these organizations in the ways described in previous answers.
Another way NALCAB provides support to its members serving small businesses is by acting as a CDFI intermediary and providing capital to members who are small business lenders. The capital we provide can be used to launch a small business loan fund or supplement an existing small business loan fund.
NALCAB also supports small and medium-sized businesses in its network by offering loan guarantee products that help members make loans to small businesses that may not be fully within their lines of credit but still wish to receive financing. We support financial companies. The guarantees we provide will help more Latino small businesses get the capital to start and grow their businesses.
Finally, NALCAB’s Acceso Fund has limited experience or limited capital in large-scale small business lending (so it has difficulty making loans of more than $50,000 to a single entity). Provides small business loan participation funds to organizations within the NALCAB network. Our Acceso Fund therefore enables lenders within the NALCAB network to make larger loans than they would normally be able to make to small and medium-sized businesses. This product allows our community lender members to reach out to businesses with greater borrowing needs (in terms of loan amounts) and enable them to grow and thrive in their communities. can.
Rhett Battle: At the grassroots level, how do community development financial institutions (CDFIs) provide access to capital differently than traditional lenders?
Mara Bironic: CDFIs are more nimble than traditional lenders. CDFIs always look for a “yes” answer and zoom out to get a complete picture of a potential borrower’s financial situation and loan request. CDFI loan officers spend a significant amount of time getting to know their customers, and unlike traditional lenders, they don’t approach deals in a rigid fashion that spits out final approvals or rejections. Although CDFIs adhere to internal lending policies, they have the flexibility to consider cases that don’t quite fit into a particular “box.” Another difference between traditional lenders and CDFIs is that the relationship between lender and borrower is typically close. This is an important difference for many reasons. The trust built between the borrower and the CDFI lender allows character to become an important aspect of underwriting. It also allows for consistent communication throughout the life of the loan. Therefore, lenders can keep track of business progress and provide technical assistance to support business owners and help them overcome challenges (keep their loans up to date). When problems arise, CDFIs work with borrowers to find solutions, such as restructuring loan terms, increasing the chances of business success. After all, CDFIs always consider the dual bottom line of community impact and transaction revenue, which is very different from traditional financial institutions whose motivations tend to be more disconnected from their customers and communities. Masu.
Rhett Battle: Why is green financing important to businesses and how does NALCAB educate its members about sustainable financing options?
Mara Bironic: Green financing is important, first of all, because it allows companies to reduce their negative environmental impacts, such as greenhouse gas emissions. It is also useful from a practical point of view, as it can generate substantial savings for business owners in the long run.
NALCAB is a founding member of the Justice Climate Fund, a coalition of community lender associations that includes groups such as the African American CDFI CEO Alliance and Oweesta. The Justice Climate Fund is a recent and historic EPA Greenhouse Gas Reduction Fund and GGRF competition winner. NALCAB, under the name Justice Climate Fund, will work with other GGRF award recipients to ensure that community lending members of our network have access to climate finance training and funding under this program. Masu. By taking full advantage of this program, businesses in NALCAB member communities across the country will benefit, and the communities themselves will be better off.
