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How Centro Community Partners Mentors Entrepreneurs

AARP Purpose Prize winner Arturo Noriega talks about his inspiration and how he helps others

Arturo Noriega

AARP

Wilma Consul:

Deciding to start a business takes a lot of effort. The Small Business Administration estimates that there are about 30 million small-business owners in the United States. About four in 10 of those entrepreneurs are women. Yet research shows that women receive less than five percent of all dollars lent through conventional loans.

 

Enter Arturo Noriega, CEO of Centro Community Partners in Oakland, California. His organization has been helping close the gap for the underserved populations in the small business field. Since he founded Centro more than ten years ago, he and his team have secured one-point-four million dollars in microloans for aspiring entrepreneurs -- mostly low-income and women of color. 

 

For his efforts, Noriega was named a 2021 AARP Purpose Prize Winner -- one of just five. The award honors people ages 50 and older who have done extraordinary work in their communities to better our world. Today, he shares the story of how mentoring just one person led to helping 45-hundred more achieve their dreams.

 

That’s coming up next.

 

Hi, I’m Wilma Consul with An AARP Take on Today.

 

Wilma Consul:

Arturo Noriega’s idea to create change through his nonprofit, Centro Community Partners, started when he was young. Born in California to immigrants from Peru, he saw his parents’ dream crushed after their business loan applications were denied. This motivated him to study economics, earn a bachelor’s and an MBA.

 

For more than 20 years, he traveled the world as a management consultant. But Noriega found himself laid off during the 2008 recession. Not one to be idle, he volunteered in helping small business organizations with limited access to financial services. And it’s this work that led him to establishing his own organization.

 

He joins us on Zoom from Peru, where he’s working at the moment. You might hear some background noise from the construction outside. But such is life in this pandemic.

 

Wilma Consul:

Arturo Noriega, first congratulations and how does it feel to be a Purpose Prize winner?

Arturo Noriega:

It is an amazing feeling and an absolute honor. I'm really humbled by being recognized for the work that myself and my team have done over the years. A tremendous sacrifice and commitment to underserved, women of color who fight every day to realize their dream.

Wilma Consul:

Tell us the story of how Centro Community Partners got started with your so called unofficial first client.

Arturo Noriega:

That would have to be Adela and she and I were paired up. In 2009, during the great recession, as I was laid off from Ernst and Young, I volunteered at four organizations. Three of them were women led and they were also working with underserved women. And one was working with immigrant women. As an advisor coming in, helping with writing business plans and financials. I was paired up with Adela. She was looking to start a business in daycare and she had been licensed, but what she really just needed is a little bit of someone believing in her and being able to guide her on how to write a plan and needed a little bit of an investment.

Arturo Noriega:

She had a pretty sound business idea and the need in the marketplace that she was looking for to establishing her business was great. And so, we were looking for a microloan, about $10,000. And so we, unfortunately, were unable to get her a $10,000 microloan mostly because she didn't have any credit history.

Arturo Noriega:

I ended up giving her the money she needed, the $10,000 so she could start her business. And out of that was an agreement, okay if I'm going to help you, I'm going to be your community partner and you're going to take a course from me and I'm going to coach you and then in that course, I'm going to teach you how to start a bookkeeping system, how to formalize the business, how to run operations, how to market your services. And that became our first advanced entrepreneurship program. And so that became the model and we started only providing advanced, what they call technical assistance services. They would have about a 100 hours with an advisor, an MBA would be partnered up with an entrepreneur and then they would work together for 14 weeks, which is just over three months.

Arturo Noriega:

And at the end of that, they would develop their business plan, their financial projections, a leadership coaching program and they would be on their way to get to a $100,000 in sales within three years. That was our first program.

Wilma Consul:

So, ten years later, how has your organization grow? What programs do you guys have?

Arturo Noriega:

Over the course of the 10 years, we developed technology. We saw that the program was actually a bit expensive and we wanted to really understand how to scale our program so it can reach more and more people. And not just a handful of people because it was limited by the number of MBAs that we were able to recruit from the local universities. And it was also limited by the number of the instructor. We could only teach 10 at a time. We created the Centro Business Planning Tool, which you could download for free in Android and iOS.

Arturo Noriega:

And that gives you the opportunity to write your business plan on your own. It guides you through a very simplified, very fun, 25, 26 activities. And you have a business plan that you can use for a microloan. And then it also connects you to organizations that are willing to help you with providing you capital. These are CDFIs that have embedded and that work with people of color that are known to provide low interest and microloans to people in California and other states and also resources in case you need additional help talking to somebody or entering any other program in your area. Now we provide basic training, basic entrepreneurship program for three months online and advanced training program online for three months and a bootcamp, which is a two day bootcamp also online. Plus the app.

Wilma Consul:

And just so people, if people don't understand CDFI, that means, community development.

Arturo Noriega:

Yeah. The CDFI is a community development financial institution and they are mandated and regulated by the US Treasury, since commercial banks they have trouble with their lending practices lending to underrepresented communities of color, the US government stepped in and said, "Okay, since you're not able to do it, but you're taking money from these communities in the form of savings and checking, we have to create an intermediary between these communities and banking practices so that we can get money going back into those communities."  So, they created this CDFI system, I think about 25 years ago.

Wilma Consul:

Now, 80% of your clients are women and low income. What kinds of businesses are we talking about here?

Arturo Noriega:

We look at the businesses that are being created as everyone you know in your community, from the mechanic to the baker, to your babysitter or your childcare service, to your clothes designer and retailer. Everybody that exists on Main Street are the type of businesses that we work with. We do not work with technology companies because there's plenty of resources for tech entrepreneurs to find the resources they need to start. But there's very, very little resources to get just general businesses started, could be a grocery store. It could be some of our most popular have been restaurants. Women tend to have all sorts of creative outlets and they're excellent at running businesses. They're excellent at running businesses.

Wilma Consul:

Of course.

Arturo Noriega:

And so what they have lacked is just a system in the community to help them rise up and to be a part of wealth generating for their families and financial and creating financial stability resources, which is what a small business does. And so we're very involved in integrating these systems and helping our community members and our citizens that are running these amazing businesses.

Wilma Consul:

What are the biggest barriers in obtaining credit and access to financial services, especially for women and immigrants especially?

Arturo Noriega:

The way our system has been built, it tends to favor people that are white. And I hate to say that, but it's the way it's been designed from the very beginning. And so once people of color were able to get their foot in the door to try to get credit, more and more people have been able to follow. The barriers to credit that we've been seeing for women of color and immigrants have been really no credit history has been one of the challenges. These people tend to not want to have any kind of credit. They're on a cash basis only. They tend to be under banked or do not have a bank account. And so, because they don't understand also that they may not have access to those resources, but banks are now, especially credit unions and community based financial institutions now are serving these populations much better much.

Arturo Noriega:

And so we're trying to bring those resources to entrepreneurs and help them understand what they can do now to overcome. Organizations like Kiva, a major partner of ours, allows for crowdsourcing to happen now. And I could raise money for undocumented immigrant women that are starting their businesses up to $15,000 with zero interest on the loan now. That's an incredible win now. And there are now those financial institutions I mentioned, the CDFIs, the community development financial institutions that are now opening their doors more to people that do not have traditional banking history and allowing for those credits to flow now. We're helping build it and bringing those resources to bear. But those are the major barriers.

Wilma Consul:

Arturo, it sounds like we always hear about people, especially African-Americans and people of color having a hard time getting loans. And it sounds like things have not changed or has it changed a little bit?

Arturo Noriega:

Oh yeah, things are changing for sure. But they are changing very slowly. It's interesting how it just in the last 10 or 12 years that I've been doing this in the United States, I've seen much more movement towards crowdsourcing and using platforms, online platforms. That's one way. I also saw the CDFIs change their credit lending practices too. Credits under 15, 10, 15,000 do not require collateral anymore. Again, some CDFIs are much more open if you didn't have any credit history, they'll still lend to you now. Things are changing and that's wonderful. I think it's a great opportunity, especially since women of color are the leading entrepreneurs in the United States and have been for the last 15 years. The data doesn't lie. They're the fastest growing group of entrepreneurs in recorded history for us in the United States. And so we're here to support that.

Wilma Consul:

Your mentorship program extends to people who aren't just trying to start a business, but also people who are looking to grow their businesses, any difference in approach?

Arturo Noriega:

Yeah, because businesses are at all different stages, we come in as advisors. And so we have what we call a rapid response group and we respond quickly to the needs of any business at whatever stage. And so we have consultants that are very well trained in operations, strategy, finance, marketing and can come in and give you consultations. And so we are affiliated with the Small Business Development Center of Northern California. And that partnership allows us to do online advisory services to the community for free.

Wilma Consul:

And how has the pandemic affected your work with these businesses?

Arturo Noriega:

We've been overwhelmed. When things got bad, we had to advise and help and do a lot of hand holding to help small businesses in the community, understand what the PPP, the protection programs were, what the idle program was that the government was offering, how to get access to those funds and grants, to understand what their needs are. We had many small businesses close because they weren't able to access capital in time, nor were they well positioned to withstand a financial shock that the pandemic had caused. And so the economics of that situation were really critical to really respond quickly, but we weren't able to always respond as quickly as we would like. At least the government wasn't able to provide that funding as quickly as we wanted it in order to help the businesses all survive. And so not all of them were able to survive. It's been really sad that some of them had to close down and that means a lot of lost revenue and families had to adjust to those drastic changes.

 

Wilma Consul:

But it’s not all bad news for aspiring entrepreneurs. When we return, we’ll hear about one of Noriega’s favorite success stories: A business owner with a talent for making ice cream.

 

Wilma Consul:

Taxpayers are navigating an especially complex tax season. In this pandemic, with unemployment, scams, the loss of a loved one or dealing with their own health issues, there is much cause for confusion. To help address these concerns, AARP will host a tele-town hall tonight, at 7 P.M. Eastern Time. The evening will begin with Suze Orman, the Emmy-Award winning finance expert. In a discussion with Jo Ann Jenkins, AARP CEO, she will share advice that people can take toward financial empowerment. Following their conversation, callers will be encouraged to ask the experts directly. We’ll hear from Erin M. Collins, the I-R-S National Taxpayer Advocate; Deborah Owens, Founder and CEO of WealthyU; and Steve Conary from AARP Tax Aide.

 

You can listen live at AARP.org slash coronavirus.

And if you miss the town hall, you can listen to it at your convenience here, on our podcast.

Wilma Consul:

Can we talk a little bit about your parents? Because your experience with them is what led to all this. Did they ever get to start a business?

Arturo Noriega:

My parents tried very hard to start a business when they came to the United States. They had immigrated from Peru in the 1960s and landed in Santa Clara, California in the late sixties and early seventies. And they try to start a leather business, making jackets. They had worked with some people here and that's what they were taught in their trade in Peru, but they were not able to afford to get a little bit of capital that they needed for the machines, for some of the inventory, product leather and also a place. As they were immigrants and they were struggling with the language, no one was able to give them a break. And that experience really stayed with me. And I thought that was very unfair because they were so hardworking. They ended up, my dad ended up working as a janitor at IBM and my mom ended up working cleaning houses and then finally at Intel cleaning microprocessing chips in a suit. But they weren't able to fully realize themselves as small business owners.

Wilma Consul:

Wow. But you're doing work now to help other people so that's great. The Purpose Prize recognizes all the hard work that you and your team have done. How did this Purpose Prize come about?

Arturo Noriega:

I saw it advertised because I'm always looking how to raise capital, how to raise awareness of our work and what can I do extra? And I knew that we had met the criteria and I wanted to just showcase the impact of that Centro Community Partners has done in the communities and for the thousands of people that we've helped. I was blown away and so surprised to even having won because were so many great people would apply for these type of prizes. That's why I felt so humble. I'm glad that we had the opportunity to apply. And really encourage anybody listening to go for it because there's nothing to lose.

Arturo Noriega:

And you can learn so much about just answering the questions. And when I just remember drafting my proposal to the AARP prize, Purpose Prize, how much reflection I had done during that week because it took me about a week to write it. And it changed everything. It changed how I should be looking at our work, how I should approach other funding opportunities. And it made a huge difference. It became a model to other drafts that we did and won other proposals. It really changed our way of working.

Wilma Consul:

Well it's totally well deserved. You and your team have helped a lot of people, a lot of businesses, any stories you can share that sticks with you, a story that fuels you to continue your work?

Arturo Noriega:

One of the people I remember working with who made a huge impression on me was Luis and he was making homemade ice cream, he had I think, 20 unique flavors in the Fruitvale district in Oakland. And he came to us. This was about 10 years ago that we were working with him. He was having a hard time paying the rent and he had a talent for making ice cream. And he just didn't understand how to run a business. And so after working with him for about a year and a half roughly, he went through our program and he started to learn. He also didn't speak English. He was from Mexico but had gotten this far. We wanted to boost him up.

Arturo Noriega:

We were able to get his ice cream into other stores and he became a distributor of ice cream and he grew that business. He ended up handing over the business over to his children now, he's still making the ice cream, but his children are now running the business and he's super successful. Is one of the most sought out ice creams in the city of Oakland. And that was like, wow, that's amazing. Now it's creating generational wealth. And that's the whole point of a small business, I think. Being able to hand that out to the next generation, to the next generation. And he became one of our star entrepreneurs as well.

Wilma Consul:

What is his business called, Arturo?

Arturo Noriega:

The name of his business is Nieves Cinco de Mayo, located in Oakland, California in the Fruitvale district. Got to try it.

Wilma Consul:

I'll make sure I get it next time I'm in town.

Arturo Noriega:

I hope so. It's the best.

 

Wilma Consul:

Arturo Noriega received the 2021 AARP Purpose Prize Award for his work as the founder and CEO of Centro Community Partners in Oakland California. Thank you so much for speaking with us and more power to your organization, your team, and your clients, Arturo.

Arturo Noriega:

Thank you, take care.

 

Wilma Consul:

Each year, the AARP Purpose Prize award honors exceptional individuals 50 and older who create new and unique solutions to long-standing societal issues and challenges.

 

Winners of the Purpose Prize receive $50,000 and up to ten fellows receive $10,000 for their nonprofit organizations. The AARP Purpose Prize award call for application ends March 31st, 2021. To see official rules or to apply, visit A-A-R-P dot org slash purpose prize. We’ll leave a link in the show notes.

 

Thanks to our news team.

Producers, Colby Nelson, and Danny Alarcon.

Production Assistant Fernando Snellings.

Engineer, Julio Gonzalez.

Executive producer, Jason Young.

And of course, my co-hosts, Mike Ellison and Bob Edwards.

If you liked this episode, share it with a friend and become a subscriber on Apple Podcasts, Google Play, Stitcher, or other apps. Be sure to rate our show as well.

For an AARP Take on Today, Wilma Consul, Thanks for listening.

As a child, AARP Purpose Prize recipient Arturo Noriega saw his immigrant parents fight to access credit. Inspired by their struggle, Arturo established Centro Community Partners, mentoring aspiring entrepreneurs. On today's show, we hear about the organization that Noriega founded — whose services have helped thousands of aspiring entrepreneurs from underserved populations.

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