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The key to successful microfinance, or small commercial loans, is combining banking practices with social enterprise, an Indigenous business conference at The University of Western Australia heard today.

David Bagheri, National Business Manager, Many Rivers Microfinance, told conference delegates that strategic partnerships between commercial banks and not-for-profit organisations could provide the capital and resources to issue and service successful microfinance loans.

"Rather than doing a charity loan or a subsidised loan we really went down the commercial path," he said.

Mr Bagheri said Many Rivers Microfinance worked with banks, as well as corporations including mining and resources companies, because these companies had "a vested interest in the communities we want to work in."

"We are lending to people who don't fit into the banking model and are learning how to do business and we are happy to go on that journey with them."

He said microfinance loans supported a variety of businesses including landscaping, dog grooming, roof tiling and cultural awareness training operators.

"Our primary goal is to create a grassroots economy where previously there wasn't one," he said.

Upon successfully repaying a loan, entrepreneurs gained a credit history and were able "to stand on their own two feet."

Most loans were repaid on time, with only 8.5 per cent classed as bad debts.

Elliot Anderson, Manager Community Finance and Development, NAB, said partnerships with local not-for-profit organisations provided invaluable expertise.

‘Reaching the right entrepreneurs and finding the right entrepreneurs was hard for NAB.  We partner with organisations who have the ability to provide the business support and mentoring,' he said.

"The other fantastic thing is that some of the businesses pop their heads up and do really well and may turn into multi-million dollar projects."

The Centre for Social Impact (UWA) is a joint venture between The University of Western Australia's Business School and the national Centre for Social Impact .

The Indigenous Business, Corporations and Entrepreneurship Conference is the Centre for Social Impact (UWA)'s inaugural conference.

Media references

Sonia Nolan , Community Engagement and  (+61 8)  6488 8562  /  (+61 4) 01 034 103
Corporate Affairs Manager, Centre for Social Impact
Michael Sinclair-Jones (UWA Public Affairs)  (+61 8)  6488 3229  /  (+61 4) 00 700 783