Over 700 loans totaling close to six million dollars have been distributed to entrepreneurs through the innovative REAP program, which began in 1990.The Rural Enterprise Assistance Project (REAP) was started by the Center for Rural Affairs in January 1990 and is celebrating a 20th anniversary this year. REAP is respected nationally as an outstanding microenterprise development program and is one of the largest rural microenterprise development programs in the US. REAP was the first microenterprise development program founded in Nebraska and set a tone for excellence in the state that continues today.
Why did the Center for Rural Affairs start REAP? The rural Midwest suffered through a difficult economy in the 1980s and early 1990s as a result of the farm crisis. High interest rates and low prices for traditional farm commodities caused an exodus of farmers. Rural communities lost population and demand for goods and services fell. Small towns looked for economic development strategies to replace the losses experienced from the agricultural economy.
In 1989, the Center for Rural Affairs studied economic development approaches in Minnesota, North Dakota, South Dakota, Iowa, Kansas and Nebraska. We published a report, Half a Glass of Water, which found high rates of self-employment in rural areas.
To better serve entrepreneurs in rural communities, the Center for Rural Affairs held focus groups with micro business owners to explore their needs. Three gaps in services were identified: training/technical assistance, lending and networking. REAP was started in January 1990 to fill these gaps.
Who built the initial REAP program? In researching and designing REAP in the late 1980’s, Center staffer Gene Severens began studying micro lending theory and visited micro lending models in the US. Only a few existed in the late 1980s. Gene served as the conceptualizer, lead fundraiser and lead designer of the original REAP group-based lending model.
Jennifer Tully worked with Gene early on in designing REAP. Jennifer left the Center after marrying, and Rose Jaspersen was hired. REAP was about half-way through the design process when Rose came on board. She was the chief designer of the REAP training model. Rose brought her “Managing Mainstreet” business training skills and designed the entire training component of the original REAP model, which made it much more viable.
Gene and Rose traveled to Cedar Rapids, Nebraska (population 400), in the fall of 1990 to begin formation of the first REAP association. Micro business owners and community development staff from Cedar Rapids had been involved in the initial focus groups and requested they be the first site for development of a REAP association.
In December of 1990 the first loan of $1,000 was made using a step-up, peer lending model at Cedar Rapids. Under this model the first loan could be for no more than $1,000 and did not require collateral or prior training. Now 20 years later, REAP has placed over 700 loans totaling close to six million dollars while also leveraging over 12 million dollars in loans from other sources due to REAP assistance. Since 1990, REAP has provided development services to over 10,000 micro businesses.
Filling a critical niche for Nebraska’s small businesses Design and implementation of REAP in 1990 required a strong, visionary and working board of directors, a committed and talented staff, and receptive participants and partners. REAP filled a critical niche in 1990 and continues to fill a critical niche for Nebraska’s startup and existing entrepreneurs in 2010. We look forward to the next 20 years and continuing our mission of strengthening rural communities through small, self-employed business development.
Contact Jeff Reynolds, REAP Program Director, at email@example.com or 402.656.3091 with questions about the program.
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