Ka Wai Ola - Office of Hawaiian Affairs, Volume 9, Number 10, 1 October 1992 — ANA reauthorization in home stretch [ARTICLE]

ANA reauthorization in home stretch

Upon the reconvening of Congress last month, the reauthorization of a bill whieh would add $1 million dollars to the OHA Native Hawaiian Revolving Loan Fund made its way

through the Senate, and at press time was awaiting action in the House of Representatives. Three years ago, Congress authorized the Administration of Native Americans to fund the ♦ =fī

NHRLF with $3 million. (ANA is a part of the federal Department of Health and Human Service whieh provides funds for social and eeonomie development for native peoples in America.) The revolving loan fund has since been used to support 91 new and expanding businesses owned and operated by Hawaiians This program has provided loans for those who otherwise could not qualify for commercial business loans.

The Office of Hawaiian Affairs picks up all the administrative costs involved in operating the program so the entire federal appropriation is used as loan principal. To date, this is the only loan fund targeted for Native Hawaiians and administered by a Native Hawaiian organization. The fund is available to Hawaiians regardless of blood quantum. The program also benefits from its partnership with the Bank of Hawai'i whieh has provided extensive technical assistance to the project. If the bill is reauthorized by Congress, the Native Hawaiian Loan Fund will be able to offer new loans over the next year. In addition, the OHA trustees have agreed to match the $1 million in new federal funds bringing the total loan fund principal halanee to $5 million. As loans eonūnueā on page 5

frompage 3 NHRLF awaits $1 million from ANA reauthorization

are repaid, the funds will be lent to other Hawaiian-operated businesses. Should the loan fund gain this additional $2 million, the Office of Hawaiian Affairs will host five weekly half-hour radio programs on KCCN to explain how the program works and how aspiring Hawaiian entrepreneurs ean apply to become loan recipients. The radio programs are scheduled for Sundays at 8 p.m. following Ka Leo Hawai'i, the all-Hawaiian language program. Exact dates and program topics will be announced in the daily newspapers.

Though Hawaiians comprise over 20 percent of the population in Hawai'i, they account for only 4.2 percent of the minorityowned businesses in the state. "If this program has put 50 new businesses on the street, these numbers will change," said Linda Colburn, who as OHA eeonomie development officer oversees

mueh of the program's operations. As of July, total requests for business loans topped $33.8 million with 700 loan pre-applications received. The NHRLF board approved a total of $3.9 million for dispersal, $3,266,897 has been dispersed to 91 businesses on five islands

The percentage of loans whieh have become delinquent has fluctuated between 11 and 35 percent. A strong commercial lending institution usually experiences 2 percent or less. The delinquency rate reflects the fact that the fund deals with high-risk loans — loans that other lending institutions wouldn't consider, Colburn comments. Other factors also play a part. Most of these businesses are in their most critical stage of development, the first five years. Also the overall falloff in the economy since the Persian Gulf War has depressed the loeal military- and tourism-based economy, Colburn added. "We're doing a lot better than other similar

loan fund programs involving native people considered highrisk. One revolving loan program we are aware of experienced an 85 percent default rate," she said. Technical assistance in the way of sophisticated marketing, increased record-keeping skills and business planning will have a stronger focus this year, Colburn said. These kinds of loans need added technical support, she said. For its achievement in promoting Native Hawaiian business ownership, the Honolulu Minority Business Development Center was to honor the Eeonomie Development Division of the Office of Hawaiian Affairs at an awards luneheon, Sept. 24, at the Hale Koa Hotel. "I was really delighted to learn that someone noticed what we've been doing," Colburn responded, "and how hard we've been working to become effective advocates for business development." -by Pearl Leialoha Page