Angie Horkey’s The Recipe opened in Westbrook on Jan. 14, and there will be as many rural economic development specialists eyeballing the restaurant as there are customers checking out the menu.
The startup southwestern Minnesota restaurant was aided by a fundraising effort known as crowdfunding, sometimes called hyper funding, in which people can invest online to promote micro enterprise development.
San Francisco-based Kiva Microfunds, which has been involved in international microlending projects, recently started a domestic U.S. microloan platform called Kiva Zip. With it, Kiva partners with local partners, called “endorsers,” who provide local technical and support services and sometimes additional funding to launch or help expand local, small businesses.
The Recipe becomes the first such Kiva project in Minnesota, endorsed and supported by the Hutchinson-based Southwest Initiative Foundation (SWIF). Kiva-raised funds were paired with a loan from SWIF’s Microenterprise Loan Program.
The foundation provides business planning, accounting, marketing and business training assistance for entrepreneurs and its work, in turn, is supported by the U.S. Small Business Administration and U.S. Department of Agriculture.
The collaboration between Kiva and SWIF makes a good fit because there are people on the ground in Minnesota with microlending experience to provide technical assistance, said Karen Grasmon, communications officer for SWIF.
While the Westbrook café is the pioneer enterprise on the KIVA platform, SWIF did handle 40 microloans in 2012, Grasmon said. The average such loan was $11,500, she added. And over recent years, the microloan program has less than a 5 percent business failure rate.
If you are passing through Westbrook, grab a cup of coffee. Appreciate the fact that economic development tools largely developed in Third World countries are now being adapted and employed here at home.