Entrepreneurship
Theme: Entrepreneurship
Cross-cutting themes covered: Tailored financial solutions for entrepreneurs
Name of project: Street Cred
City: London
What is it? Street Cred is a micro-credit project for women with a business idea who are in low income jobs or on social benefit. Street Cred promotes entrepreneurship through a system that reverses conventional banking practice by removing the need for collateral and creating a banking system based on mutual trust, accountability and participation.
Who is it? Street Cred is delivered by Quaker Social Action, a registered charity limited by guarantee. It works in partnership with Account 3 and the Environment Trust. Street Cred and Account 3 deliver training activities, while the Environment Trust manages the loans.
Where is it? Street Cred supports and promotes entrepreneurship in East London, in areas of high unemployment and low income rates. For example, the vast majority of wards in Hackney, Tower Hamlets and Newham (local authority areas in which the project operates) are ranked in the top 10% most deprived wards in the UK.
Who funds it? The initiative gets funding from various sources, such as EQUAL, London Councils (formerly the Association of London Government), the Phoenix Fund, Quaker UK and others. In some cases, the funding is limited to certain activities or geographical areas. Continuing fundraising is essential for the sustainability of the initiative.
How does it work? Outreach and mentoring support: The initiative is delivered by one full-time and four part-time outreach development workers, who provide advice and support. There are also two part-time sustainability officers, who support clients who, having received a loan, are in a position to access mainstream funding and move their initiative further forward.
Mutual support groups: The women organise themselves into ‘borrowing groups’, mutual support groups where they come together to discuss common issues and share experiences. The group structure varies – some groups are defined by business type (for example one of the most stable groups focuses on the design business) or business support sector, e.g. marketing. The group members provide each other with support and an initial network of contact for clients. The groups meet twice a month with a development worker to discuss specific issues or receive training. The groups can meet more frequently if necessary and additional training events are also organised (for example, training on tax systems).
The granting of a loan is based on the condition of joining one of these groups for three months. Individuals have to get an agreement from the group before a loan is issued. If one person fails to repay the loan the group is penalised. This ‘moral collateral’ is the backbone of Street Cred and in fact all micro credit systems.
What are the results? Street Cred currently works with over 138 women in 30 active borrowing groups throughout East London. The women involved in the project are from over 25 different nationalities including Bangladeshi, Caribbean, Croatian, Kenyan, Iranian, and Zambian.
Is it successful? The initiative is considered as best practice given its responsiveness to local needs and the flexibility of its delivery (school-friendly hours, group delivery which provides mutual support and ensures that clients do not feel ‘on their own’). It has been successful in targeting and reaching a particularly disadvantaged group and in providing role models for people.
Street Cred was awarded a British Urban Regeneration Award 2003. The Awards aim to recognise schemes originating within the community, which effectively address local needs, enhance quality of life, and above all, underpin long-term sustainable change. It was also awarded a PROWESS flagship award for Best Practice in Women's Enterprise Development.
Is the model transferable ? This initiative is clearly transferable since it is based on the principles of mutual trust and support, rather than any specific competitive advantage. This initiative has worked well with the disadvantaged communities of East London, and it was based on similar initiatives already carried out in Poland, France and Bangladesh.
Building on local competitive advantages? According to Street Cred, the fact that the project is based in the East End of London potentially has a lot to do with the success of the initiative, particularly as a result of the area’s diversity. The concept of micro-credit has been adapted from developing countries, from where many of the clients originate.
What are the barriers to transferability? Lack of finance and appropriate delivery partnerships would pose a barrier to transferability.
