Bosnian refugees make start with credit union's assistance

David Becirovic arrived in the U.S. with his family, a few bags of luggage and about $10.

He needed a loan.

On paper, his prospects were not good. Becirovic was a refugee from war-torn Bosnia-Herzegovina. He had a remarkable history- but not the kind that shows up in a credit report.

Still,

Confronted several years ago with a tide. of refugees who could offer little more than promises, Cornerstone managers swallowed hard and loaned the money. That decision helped hoist an entire community into the American economic mainstream.

"Cornerstone was my first step," Becirovic said. I couldn't start without that loan."

Credit by gut

Pulling Becirovic's credit report, you wouldn't know that he used to run major industrial projects for a Bosnian company. You wouldn't know that he fled the war in BosniaHerzegovina with two small children. You wouldn't see the bridge blow up behind his family just after they crossed it, or feel the uncertainty of the years they spent as refugees in Germany.

To know about all that, you would have to look at his prematurely gray hair - and ask.

When the first refugees trickled into Cornerstone's office around 1999, lenders started asking questions. They started making loans. And they started a chain reaction.

Word spread quickly in the Bosnian community that the credit union was willing to help, and now Cornerstone has more than 300 Bosnian members.

"There was an unending need for loans," said David Keffer, chief executive officer of the credit union. The refugees needed cars to get to work. They needed furniture. They needed help covering daily living expenses while they got settled.

Refugees from BosniaHerzegovina started coming to the United States in 1992, when war broke out. The State Department estimates that over the next decade, 120,000 people settled in the U.S. There is no definitive count of the refugee population in the midstate, but local leaders estimate that it is in the thousands. Many came here in the late 1990s, after other places where they had been staying tried to send them back home. Many moved to Central Pennsylvania from other American cities. The refugees include Bosnian Muslims, Bosnian Croats and Bosnian Serbs, the three antagonists in the war. Most immigrants to the U.S. are believed to be Bosnian Muslims.

Breaking in with minority communities that have little experience with mainstream financial institutions is not easy, said Lonny Maurer, chief executive officer of Belco Community Credit Union in Harrisburg.

Belco, is reaching out to groups including Bosnians, Vietnamese, Hispanics and blacks in various parts of the midstate.

"They don't know the system. They don't trust the system," Maurer said. "We're trying to build a bond of trust. You work very hard at it."

Once a few Bosnian members got comfortable at Cornerstone, they told others about it. Soon, the credit union was serving scores of refugees.

Lending to the newcomers was a difficult decision, Keffer said. There was no credit history only references from other refugees, and good experience with the few who had come before.

The new community represented a growth opportunity for the credit union, and lending to the refugees seemed to fit Cornerstone's mission. Managers decided to go ahead in a measured way, Keffer said.

"A lot of it was just on gut feeling, character," Keffer said. "You wanted to be able to help. You wanted to be able to get them started."

Cornerstone does not do risk-based lending, in which borrowers with worse credit pay a higher interest rate. Everyone got the same deal.

Becirovic knows about tough business decisions. He used to keep the books and handle finances for a big holding company. Its activities included making air conditioners.

"In any business, you have to be a little bit (of a) gambler," Becirovic said. "(Keffer) was gambling with us because he didn't know who we are. I am proud that I know that kind of guy."

Strange ways

Bahira Omerovic didnt know what to do with her new credit card.

She had just arrived in Seattle with her husband, Izudin, and her two children. Every lender they approached turned them away. Go plastic first, they were told. Build some credit.

So they got a Providian card, bought things and dutifully paid off their balance every-month - not realizing they needed to carry the debt for a while to build their credit record. The family later moved to Central Pennsylvania, and Bahira Omerovic now works as a teller at Cornerstone.

Credit was much less common back home, and Bosnians feel uncomfortable being in debt, Bahira Omerovic said. But the same traits that made Bosnians so puzzled by debt in the United States also made them great borrowers.

"They took the responsibility very seriously here," Omerovic said. "They don't like to owe money."

Cornerstone saw almost every loan paid back - and then people started to open savings accounts. Bosnian members often deposit their entire paychecks rather than drawing some cash. Delinquencies among the Bosnian borrowers are also unusually low. The immigrants have better financial habits than many Americans, Keffer said.

The thriftiness has paid off. Cornerstone sees the refugees taking out more ambitious loans - for home mortgages and even small businesses. The credit union has loaned money to at least eight members to start small tractortrailer hauling businesses. Those loans are for about $50,000.

The next step

At 47, Becirovic is now a state employee.

Becirovic and his wife, Ildijana, fled from Sarajevo in 1992 with two young children who now are 15 and 17 years old. After years in Germany, the family finally came to the U.S. in 1998.

Becirovic used small loans from Cornerstone to buy a car and furniture.

Now, Becirovic wants to move further. He wants to start a business that would serve the agricultural sector, and he needs serious money $5 million.

Becirovic is finalizing his business plan and talking to state officials about public funding programs. He hopes to get started with public funding and augment that with private sources, such as a bank loan. Becirovic asked that details of his plan not be disclosed because he does not want his idea to be copied.

He is trying to persuade the state to recognize Bosnian refugees as a group that deserves access to funding for minority businesses. More generally, Becirovic believes the refugees should have an advocate in state government, someone who can help them secure pensions they earned back home before the war and have their professional accomplishments recognized here.

He still sounds like a businessman through and through. His conversation is a mix of hopeful aphorisms and hard realism.

"Look, America is the land of opportunity, and it's up to you," he said. "But I have a huge problem."

A $5 million problem. Once again, David Becirovic needs a loan. AT A GLANCE

Cornerstone Federal Credit Union

Founded: 1974, to serve employees of what is now the telecom firm Embarq Corp.

Members: 8,774, including Embarq employees in Pennsylvania and New Jersey and employees of 265 other organizations. The credit union also serves people in Carlisle or Newville.

Employees: 30

Headquarters: Hampden Township, Cumberland County

Assets: $60.3 million