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Meet Ofelio: Small Businesses in Low-income Communities
Ofelio prepares Tamales in his kitchen. (Joseph Molieri/Bread for the World)
Ofelio left his home in rural Mexico almost 30 years ago with no family in the United States, no knowledge of English, but a strong work ethic and determination to find a better life. He hasn't been able to return to Mexico for more than 20 years, even though his parents, both in their 80s, would like to see him for what would likely be the last time. He still wonders if it was a mistake to come to the United States. Like most immigrants, he wanted the things for his children that are harder to come by in much of Latin America: a secure home, plentiful food, and an education to prepare them for success. He did find some of these things in the United States, but it cost him dearly in health and well-being.
Ofelio’s first job in the United States was washing dishes in a New York City restaurant at a sub-minimum wage. To keep his job he was expected to work seven days a week, 12 hours a day with no sick days, vacation time, or promise of job security. His employers often asked him to work extra hours without pay. He knew that if he objected they wouldn’t think twice about replacing him. Ten years of life on poverty level wages drove Ofelio into a state of deep depression that he says almost killed him.
Ofelio started making tamales out of his home nine years ago for people at his largely Latino church. After a few months, he was getting orders on a regular basis, and the prospect of making a living from tamales grew as he built up a client base in the city’s Latino community. With a lot of hard work and the help of a local nonprofit, Ofelio was able to obtain all of the necessary permits and certifications to legitimize his catering business. He now has insurance, a bank account, and even a website and business cards. As a single father of three, Ofelio knows that the business is his family’s lifeline, and his income still provides little more than essential needs. He combines tamale order drop-offs with school pick-ups and prepares tamales and family meals in the same kitchen.
If you ask Ofelio about his ideas for the future of his business, his eyes light up. He has many, like renting a commercial kitchen to increase production, purchasing a delivery vehicle, and hiring full-time help. Beyond the business, he’d love to take classes to improve his English and be able to provide quality childcare for his two youngest daughters. These kinds of investments are only possible with the help of a business loan. But Ofelio has been denied that help from banks, which deem his business too small and too much of a risk. Without access to capital, Ofelio has no means of moving his business—and his family—beyond just barely making it.
A federal bond program established under the Small Business Jobs Act of 2010 authorized the issuance of long-term bonds at low-interest rates to fund community development finance institutions (CDFIs), which in turn provide small loans to businesses like Ofelio’s. The program was supposed to operate from 2011 to 2014, but was held up in Congress for more than two years pending approval on how it should be run. The delay resulted in $2 billion less in loans to support entrepreneurs like Ofelio. Congress should have moved more quickly and the administration should have been a stronger advocate for the program to overcome the delays. Entrepreneurs in low-income communities are the bedrock of the workforce. Investing in them grows opportunity for all of us and enables more people to work their own way out of poverty and hunger.
Fostering micro-entrepreneurship is one critical piece of the 2014 Hunger Report’s jobs agenda—the first pivotal step toward reversing record hunger rates in America.
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