Opportunities for ethnic minority entrepreneurs Gerard Boekhoven 11 October 2005.

Opportunities for ethnic minority entrepreneurs

Gerard Boekhoven

11 October 2005

2

Our challenge: improve market share in the urban regionEthnic minoritiesmainly in thelarger cities

Low marketpenetrationin the largercities

3

New entrepreneurship in The Netherlands• Ethnic minority entrepreneurs = new entrepreneurship

• A few statistics:

• over 40% of the new entrepreneurs is located in the 4 major cities (Amsterdam/The Hague/Rotterdam/Utrecht)

• 15-20% of the companies in these cities is owned by new entrepreneurs

• new entrepreneurship concentrated by geography and sector

• room for improvement of success rate

4

Our approach is based on• The strategic choice to develop an integral vision on urban themes

• Value creation is central theme

• Urban themes like:

- Urban renewal: Emphasis on an integral development of the area/neighbourhood

- Economic development in neighbourhoods and districts:Keeping neighbourhoods economically vital and stimulating economic activity

5

Our approach is based on (continued)

- Reorganising industrial neighbourhoodsDeveloping new concepts supported with financing

- Healthcare / Elderly healthcare: Strong increase of demand, in which demand of the ethnic part of the population is increasingFinancing and system of solidarity both under pressure

- Education:Financing will get more and more a private character

• Developing alternative financing instruments in order to find solutions for these urban themes

6

Specific needs of these ethnic minority entrepreneurs• Limited starting capital

• Limited collateral

• Flexibility of repayment schedule

• Profile of microstarters is perceived as risky due to lack of track record

• Lack of knowledge and information about financing possibilities

7

Set-up of microfinancing funds • Goal is to stimulate (ethnic) entrepreneurship

• Instrument is used as a result of our integral vision of the area to fulfil a specific need of small starting (mostly ethnical) entrepreneurs- area vision shows the financial strength of the neighbourhood- translation to desired entrepreneurship in the area

• Arrange supportive policy together with the government (accommodation / permits to establish business etc.)

• Set up of microfinancing funds together with local government(securing the economic development of neighbourhoods and areas)

8

Structure of microfinancing funds • Original principles of microcredit

- trust - pride - independence

• Social security in stead of financial collateral- entrepreneur connects its neighbourhood with its enterprise

• Review based on different principles- financing register / stimulation of variety of business propositions

• Support in order to increase success rate- coaching in order to come to a business plan - training and workshops- mentoring- providing access to network of entrepreneurs

9

Conclusions• Vision on economic development in neighbourhoods, support and

mentoring - reduces the probability of failure of new entrepreneurs- reduces usage of social services- creates employment- AND strengthens the economic value of neighbourhoods

• Development of economic value is connected with the development of the socio social value

• It is essential for local governments to develop an integral vision on urban themes like entrepreneurship, healthcare, elderly healthcare and education