Loans brought community jobs, hope

Development Credit Fund Inc. closed in June after 21 years of providing loans and other assistance to small businesses in the Baltimore region.

Committee in 1983, the DCF was financed with $7.5 million from six area banks. The Maryland General Assembly created a loan guarantee fund for the same amount through the Maryland Small Business Development Financing Authority. The DCF was the state's first joint public-private financing entity.


Ackneil M. Muldrow II was named the fund's president and chief executive. He still was running the fund out of its Charles Village offices when it closed on June 30.

Throughout its history, the DCF has provided nearly $40 million in loans, generally spanning five to 10 years for working capital, equipment and machinery. It also managed nearly $5 million in federal funds through various community development programs.


One of the DCF's most successful efforts was the Diversity Retail Entrepreneurial Loan Fund, a $1 million partnership with Nike Inc. and the Maryland Department of Business and Economic Development to aid minority entrepreneurs in opening athletic apparel stores in low-income areas. At its peak, as many as six stores operated in such local communities as East Baltimore, Cherry Hill and Highlandtown.

Muldrow, a graduate of North Carolina A&T; State University, worked at Commercial Credit Corp. in Baltimore and the Montgomery Ward & Co. before joining the DCF.

In an interview, Muldrow discussed the Nike program and other DCF efforts.

One of the Development Credit Fund's most successful programs was the venture with Nike and the state.

That was really was a coup for us. Really a coup. I don't think anybody else has done it. We were really pleased that we got the attention of a national organization.

Nike had been under some criticism for the lack of stores owned by African-Americans?

With Nike, as with many other companies, it's a distribution process. You don't want your shoes competing with your shoes. Nike could not put its money up to compete against other Nike outlets. That's how they controlled the market. When Nike decided to get into the program with us, we chose to support Nike-type operations.



Because in the areas where the stores were, there were none [owned by African-Americans] nearby. There was no retail outlet for the Nike products in black communities.

Kenneth N. Oliver, DCF senior vice president] and I were talking one day, and I said: "Look at all those people buying those Nike products. There's not an African-American or minority on the other side. They need to be selling, not buying."

What attracted the DCF to the program?

We were in the inner city. The customer base was in difficult areas, like Cherry Hill, East Baltimore.

What was it like approaching the company?

When we went out there [Beaverton, Ore.], we had our PowerPoint presentation ready, only to find out that they had done such an investigation on us; they knew all about us before we even got out there. They said, "Let's go right to the presentation." We were shocked.


We had [Joseph Haskins Jr., president and CEO of Harbor Bank of Maryland] because Nike wanted to put some money into a black-owned bank. We brought a vice president to Baltimore for a tour of the facilities that we were working with.

What they told us was that they had investigated our organization. They felt we were structured well, and we had the right support staff and the right philosophy. They got a lot out of it.

Did you feel as if you were selling out to Nike?

We didn't look at it from the protest side. We were concerned about the retail end.

Did the DCF stores suffer because of the later accusations of sweatshop conditions in Nike's factories overseas?

Oh no. I'm dealing on the retail end; That's the manufacturing. On the retail end, the only thing they wanted to know was can I get that shoe


Can you get it and can you move it ?

There you go! I'm not worried about all that other stuff. We were able work with them on that.

Several of the stores eventually closed. Why?

When the economy went down [in the early 1990s], a lot of customers had gone away. It was really difficult for them to make it.

We worked with them as long as we could. Some of the people decided to just give up, because they didn't have the deep pockets or the resources. We still have two stores in Prince George's County. They have funding from other sources. They paid us off.

The young people who had the opportunity to do this, they're the better off. I think the community is the better off, in that they had that kind of exposure, they had that kind of opportunity and convenience from having a Nike outlet in the community.


Were the stores affected by Michael Jordan's retirements back then?

When Michael first retired [in 1994], man, that hit hard. That really hit hard. He was the mainstay in the industry. The industry itself had a downturn -- and that affected our people, too.

Jordan, then, was so hot with his shoes. When they announced that Michael was thinking of another shoe, the market stopped to wait for that shoe. And when it came out, at $150, they gobbled them up. They could not find enough to sell.

Was this the case with the retirements in 1998 and 2003?

The impact, once he came back with the [Washington] Wizards, was a little different. It didn't quite have the mainstay. By then, Nike had Tiger Woods and other people they could look to.

One of the things you'll find now is that you won't see any of those big promotional bonuses like you saw back then. They'll pick one or two


Like LeBron James, of the Cleveland Cavaliers ...?

Like LeBron, and you won't see a whole lot more. The personal endorsements were getting out of hand. But it sold. I mean, the brothers said, "I want that Michael Jordan-that'll-make-me-jump-12 feet-shoe." They were able to make money off that.

But you still have kids wearing $150 shoes ?

Oh sure. Sure. They're still going to do that, because they have LeBron; they'll find somebody [to promote Nike products]. They'll find somebody.

What were some of DCF's other successful programs?

The Community Development Block Grant Program. One of the programs we ran has been beneficial for jobs-creation and for ridding communities of slum and blight. It had an area benefit. We worked with funding [the Hilltop Supermarket] in Cherry Hill that created jobs.


Once that supermarket opened, then the Cherry Hill Shopping Center did well. Not only was the Hilltop a grocery store, but guess what? The Hilltop was a post office, it's a check-cashing service. Yes, it was a supermarket, but it has a customer-service desk to pay bills. They do all these things, everything for the community. And when you cash that check, people go in and shop at other stores.

We felt good. There was an area benefit.

It's the same with City Hall's efforts to bring more large supermarkets back to the city, right?

Yes, they're doing that. And they're hiring people from the community, but that is not the same as ownership. That is very different from ownership.


If I walked into a store, for instance, and asked them to fund a Boy Scout troop or a certain program, the store manager would say: "If you fill out a form and we'll send it to Oakland, California, we'll see what we can do."


That doesn't translate to me as really active participation.


Because where you don't have people in your community who can give readily, and support beneficial projects readily, you're not really supporting that community.

Looking back, it appears that these past 21 years have been as much an education for the DCF as it has been for the businesses you've helped?




Because we felt there were people out there who were, in many instances, a little more sophisticated in good business practices - and, yet, we realized that we had to grow with them, training them. We also were building a business while we were training people in their business. We had to run a good business operation, too.

As I look back at what we have done -- as far as the systems of credit evaluation, systems for maintaining our records, with regards to accounting, document imaging -- I don't think you'll find any organization this size quite as sophisticated at the Development Credit Fund.

So, it was an education. We learned about small businesses, how to work with them more effectively and more efficiently, in various industries.

How did you do that?

One thing was that we had to dream along with many of our borrowers, to understand where they wanted to go. They may not have been able to articulate it or put it on paper quite like we wanted, but we had to dream along with them.

Sometimes, it ended up as a damn nightmare, but [chuckle] by and large, it worked out.