Ka Wai Ola - Office of Hawaiian Affairs, Volume 8, Number 5, 1 May 1991 — OHA loan fund program to come under ANA review this month [ARTICLE]

OHA loan fund program to come under ANA review this month

The Administration for Native Americans (ANA) is initiating a formal evaluation this month of the Native Hawaiian Revolving Loan Fund demonstration project. A team of evaluators contracted by ANA will be in Hawaii this month to leam more about how the loan fund program is working and to identify areas that could be improved. They will be meeting with OHA administrators, Native Hawaiian Revolving Loan Fund staff, the loan fund review committee as well as members of the NHRLF advisory board. The team will also begin to set up appointments to meet with Hawaiians who have received loans as well as with those applicants whose loan requests were not granted. Meetings with commercial bank loan officers are also planned to better understand the impact of the ioan fund project on the overall lending arena. Their purpose will be to evaluate the effectiveness of the revolving loan fund, whieh is intended to assist Hawaiians to start a business or expand an existing one. The team will prepare reports on their findings for ANA and for Congress whieh will include recommendations on whether the revolving loan fund program should be continued. Their findings will also be considered as part of Congressional deliberations regarding reauthorization of Administration for Native Americans funding. ANA is a federal grant agency whieh provides funds for social and eeonomie development for native peoples in Amenea. The Native Hawaiian Revolving Loan Fund is a three-year demonstration project in whieh ANA provided $3 million in loan principal to make

business loans available to Hawaiians in business. Applicants must meet specific criteria including for example, presentation of a business plan. Applicants must also show that they have been denied a loan by two other commercial lending institutions. Repayment of loans by recipients is critical to the recirculation of principal to provide a pool of funds for new loans, under this revolving concept. OHA's revolving loan fund program is currently the only loan fund targeted to Native Hawaiians (under federal law, this applies to Hawaiians of any blood quantum). The program benefits from its partnership with the Bank of Hawaii. This program is aiso unique because the funding provided by ANA is also managed and administered by a Native Hawaiian business organization. OHA Eeonomie Development officer Linda Colburn, under whose jurisdiction the loan fund operates, says the success of the Native Hawaiian Revolving Loan fund may ultimately serve as a model for use by Pacific Islanders and other Native American groups in the future. "More importantly, it ean demonstrate that native peoples are capable of managing a successful revolving loan program." Colburn added "This program is an innovative mechanism that ean help native peoples establish new or strenghthen existing ventures. The program's heavy emphasis on monitoring and technical assistance provides the kind of attention and support to inexperienced entrepreneurs that dramatically improves their chances for success. As of March 3 1 , 1991 the NHRLF had disbursed 53 loans totalling $1,926,200.