Working from this premise, Golden LEAF early on saw the value of partnership with two institutions who leverage their lending to have the most impact in our target areas of tobacco-dependent and economically impacted communities. The Center for Community Self-Help provides loans and technical assistance to small businesses, in both startup and expansion phases. The Rural Economic Development Center's approach is to work with banks around the state, providing a loan loss Lreserve that encourages banks to make loans to microentrepreneurs they would otherwise deem too high a risk.

CENTER FOR COMMUNITY SELF-HELP

Often referred to as North Carolina's development bank, the Center for Community Self-Help is the country's first statewide, private-sector financial institution focusing on economic development in depressed communities. Golden LEAF's first grant of $200,000 to the Center allowed Self-Help to leverage more than $10 million for 46 loans in 19 counties. These loans helped create or save some 250 jobs.

A new grant in 2002 added $250,000 which Self-Help will use to continue to expand the program in areas affected most negatively by the decline in tobacco.

Self-Help's outreach goes directly to the agricultural community, including tobacco farms. "We work with partner groups in rural communities who have interacted with farm families for years," said Fred Broadwell, director of the Self-Help Credit Union Ventures Fund's Sustainable Development Initiative. "We're just beginning to see some of these projects get off the ground— ventures that collectively can transform the farm economy."

Lea Clayton is developing an organic farm in Saxapahaw, with financing from Self-Help's Sustainable Development Initiative.

"We're just beginning to see some of these projects get off the ground—ventures that collectively can transform the farm economy."

RURAL ECONOMIC DEVELOPMENT CENTER

For more than a decade, the Rural Economic Development Center has worked with North Carolina's rural communities, growing businesses, expanding infrastructure, and supporting community-based organizations.

The Rural Center's Capital Access Program recognizes that although local banks are the most proficient source of business lending, banks must limit loans to those with the lowest risk. This can mean some solid business ideas from "microentrepreneurs" fail to secure financing. Phase One of the CAP involved more than 600 loans worth some $31 million.

Golden LEAF's 2002 Economic Stimulus package included a $3.4 million grant to support the CAP's second phase. The Rural Center expects to leverage this into $100 million in new loans by creating a special loan loss reserve that enables participating banks to make loans that carry a higher level of risk than allowed by conventional guidelines.

Branch Banking & Trust Company (BB&T) is one of the banks that has worked with the Rural Center on the CAP program since the beginning. BB&T's Small Business Banking manager, Lynn Harton, sees CAP as a tremendously successful program. "It's an especially successful product that has been good for the clients, the community and the bank. We now have $27 million outstanding, with 485 clients, in both phases of the CAP program in North Carolina."

In its first three months, the second phase of CAP is looking like another success story. Participating banks have made 178 loans totaling $3.7 million, creating 178 jobs, and assisting with the retention of another 511 jobs. According to Harton, CAP has been growing at about 30 percent per year. "These are clients that we would not be able to help without this program," he said. "We are very grateful to Golden LEAF for support of this project."