Rutgers Alumni entrepreneurs give advice on growing social businesses

Dec. 8, 2011 - PRLog -- Social Entrepreneurship is a growing field that applies business models to help a social cause. It is “profits with a purpose,” as PSEG Foundation President Vaughn McKoy recently described at the NJ Social Entrepreneurship Summit.

Joe Shure (RC ’09) and Rohan Mathew (SAS ’09) started The Intersect Fund while they were still students at Rutgers in 2008. The Intersect Fund is a New Brunswick-based business offering a variety of educational and business services to low-income local entrepreneurs. Using the Grameen Bank microfinance model, which turns conventional banking practice on its head, The Intersect Fund allows emerging entrepreneurs to earn loans with no traditional collateral, to start or enhance their small businesses.  “The system works on a kind of social collateral,” Mathew said in an interview with Rutgers Focus. “Entrepreneurs form groups after they receive business training; if any member of the group defaults on a loan, other members of that group cannot get loans.” This idea won Grameen Bank a Nobel Prize in 2006.

The Intersect Fund relies largely on student staff members to administer their business services. Volunteers also keep labor costs affordable. Though young, they are well trained, having gone through a rigorous process to understand the intricacies of small business ownership and the needs of local entrepreneurs. Their connection to the university gives them more resources for entrepreneurs and customers. Everyone involved is working toward a more vibrant and sustainable community.

Intersect Fund Founders, Mathew and Shure

The Intersect Fund won the Rutgers Business School competition in 2009, and since then, lending volume has picked up quite a bit. When they won the competition, they had given out two or three loans, and now The Fund has provided more than 84 loans to local entrepreneurs totaling more than $100,000.  They have also trained approximately 150 clients in business plan writing. The organization received federal funding to hire a full-time loan officer, which has helped them grow operations to an additional office in Orange, NJ.

Universities replicate Intersect Fund model
This microfinance idea has been growing in popularity, as other schools try to model The Intersect Fund in their college centers. “Back in 2009 we had our first conference and we would often get calls from students at other schools who wanted to  start something similar, so we thought, ok let’s try and raise some money to make this more official,” says Shure. The Campus Microfinance Alliance was started to offer technical assistance and grants to these schools. There are currently chapters at schools like Yale, Brown, UNC Chapel Hill in addition to Rutgers, where these aspiring entrepreneurs are using this model to grow social businesses in their own way. “What’s interesting is, we are all basically doing the same thing, but we have very different ways of doing it,” says Shure. “It’s interesting to see people take the idea and run with it.”

The Intersect Fund team also plans to do more work in Orange and beyond. They are becoming known as a trusted ally for low income entrepreneurs throughout New Jersey. “Hundreds of loans and clients a year is our goal.  We can make a real difference in the lives of the entrepreneurs, but we also see it making a difference in New Jersey’s economy in these Urban centers.”

Aspiring entrepreneurs face many challenges on the road to building a business. When Mathew and Shure first got started, they had a tough time getting donations and support from foundations. “That is a problem most students face when trying to start these kinds of groups or businesses,” says Shure. “When you’re first starting out, it’s tough for people to take you seriously.”

According to Shure, starting a social business is a very challenging but rewarding experience. “Have a very strong sense of what need you are trying to meet, and be able to document it in a convincing way,” he advises. “Prove how you would satisfy the need and be meticulous about tracking your outcome. Have numbers to show that what you’re doing or will do, works.”

He said the most rewarding thing so far has been getting people interested in social entrepreneurship who didn’t know about it before The Fund. “We have situations where people wanted to go into accounting or finance and then end up joining the Peace Corps insead.”

To learn more about The Intersect Fund, visit: http;//www.intersectfund.org

To learn about Rutgers Business School’s The Center for Urban Entrepreneurship & Economic Devlopment, visit: http//www.business.rutgers.edu/cueed

# # #

Rutgers Business School delivers people with business, science, and technology credentials to drive local, national, and global markets. More than 4,500 undergraduate and graduate students in New Jersey, China, and Singapore go to Rutgers Business School.