September 2002  Issue No. 20                    REAP HOME PAGE         A publication of the Center for Rural Affairs

Rural Enterprise Reporter

REAP Is Achieving Scale on a Statewide Basis
Flexible management and delivery of quality products and services help this microbusiness support program scale up statewide.


The Rural Enterprise Assistance Project (REAP), a program of the Center for Rural Affairs, is one of eight microenterprise programs chosen to participate with the Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination (FIELD) at the Aspen Institute. Each program implemented strategies targeted to achieving scale.

Achieving Scale means dramatically expanding program outreach and generating significantly higher numbers of clients over time. Reaching people in need of microenterprise services is the overall goal. REAP’s objective was to show that building the scale of a successful program to serve all rural areas of a state while securing long-term state support for this work is possible.

This article focuses on the development and enhancement of products and services used by REAP for reaching maximum potential. This is one component of REAP’s strategy in achieving scale. Please contact Jeff Reynolds at 402.656.3091 or to view the complete report.

Growth and Expansion
REAP’s overall growth has been steady and consistent. Since 2000, lending dollars loaned increased by 35 percent and leverage growth by 34 percent. REAP provided services to 495 clients in Fiscal Year (FY) 2000 and 520 clients in FY 2001, an increase of 22 percent in yearly client activity since 1999. We expect to serve 600 clients a year by 2005. Based on REAP data from the last four fiscal years, we found that:

  • 73 percent of clients receiving loans were low-to-moderate income.
  • A majority of clients receiving loans were women.
  • REAP’s current default rate is 1.15 percent.

Meeting Challenges Head-On
Achieving scale in Nebraska on a statewide rural basis comes with many challenges and barriers. Geography will always be a barrier. REAP deals with this by placing staff in field-based offices across the state. Still, as REAP increases reach in served counties and enters those that are not yet served, the distances spanned remain a challenge.

Scaling-up can also lead to staff barriers. We revised the REAP delivery model to make it possible for existing staff to reach new areas of the state and yet avoid burnout.

A third barrier is funding. As private foundations continue to move away from funding program delivery, it must be replaced by other sources. Public support from the state has been a key funding source for microenterprise programs in Nebraska. Keeping this funding stream viable will be critical for future survival.

New and Improved Services
REAP services were delivered exclusively through locally formed peer groups from 1990 to 1999. REAP staff decided in 1999 to expand the lending portfolio to also provide direct loans to individuals.

With a growing micro sector, peer borrower businesses often grew beyond REAP lending limits but were not eligible for loans at the local bank. In areas where there were no REAP associations, individuals who could not access a loan at the bank had no access to lending capital.

In early 2000, the REAP Direct Loan Program became a permanent part of the lending products offered to REAP member businesses. This new program, which now makes individual loans in the $1,000-$25,000 range, provides loan capital for those who are falling between the cracks where no other lending capital is available.

Since 1990, REAP has placed 261 peer group loans totaling $447,973. Since 1999, REAP has placed 60 direct loans totaling $811,898. REAP has leveraged an additional $2,257,260 in loans from traditional sources since 1999 due to its business planning and loan packaging services.

Individual Program Membership
In 2002, we launched the REAP Individual Program to serve microbusiness owners who do not have access to a REAP association. The new Individual Program is available for graduated members from the peer program or if there is no association available. Individual members have the option of attending regional meetings but are not required to attend monthly meetings of a peer group.

Moving away from the peer program has been challenging for REAP. The ability to form and maintain peer groups in every area of Nebraska is not possible without a huge increase in staffing. The Individual Program gives REAP staff the ability to provide services in areas where no peer group is available and to clients that prefer an individual approach.

Although the peer component remains a large part of the REAP program, difficulty in forming and maintaining groups had increased over the years. After intensive staff planning retreats and analysis, REAP staff felt that, with key changes, the peer process was still a viable mechanism for reaching rural clients in Nebraska.

The new model contains many of the features of the original, but provides more options for group structure and flexibility in scheduling. The model includes a “graduation” strategy, yet clients still have access to REAP services. Under the new model, associations will be required to meet for 24 months. Beyond this time associations can:

  1. Graduate and help form a new association.
  2. Sign a new contract for continuation of the peer model services.
  3. Join the REAP Individual Program.

REAP now uses a “dual delivery” system with the inclusion of an individual model. This system gives more options to clients seeking services. Staffing questions and continued viability of the peer component will remain the major concern with this delivery method. REAP will closely monitor these issues, and we will be prepared to make changes and additions as needed. This is part of the continual evolution of REAP and is necessary to maximize program outreach, performance, and efficiency.

The following is a list of products and services that were added the past two years and some yet to be implemented:

  • Direct loans (up to $25,000)
  • Dual Delivery System (Peer & Individual)
  • Loan packaging and leverage
  • Health insurance program
  • Website – online model (
  • Women’s Business Center Project
  • Quick GROW loans (up to $1,000)
  • Hispanic component (yet to be determined)

Since beginning in 1990, REAP has continued steady growth. REAP has shown that it is possible to build the scale of a successful program to serve all the rural areas of a state while securing long-term state support. One constant with REAP is providing quality services and products for its clients. Although the services and products have changed and evolved, the quality remains. Not being afraid to change and offering a program that meets today’s ever-changing society have been key for REAP.

Contact: Jeff Reynolds, REAP Program Director at 402.645.3296 or for more information.

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Center for Rural Affairs -- Rural Enterprise Assistance Project
145 Main St.    PO Box 136    Lyons, Nebraska  68038
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