US MICROFINANCE: High School Students Making a Difference
A Brief History of Microfinance
The idea of credit and savings has been around for centuries
Muhummus Yunus (Grameen Bank, Bangladesh) popularized the idea after winning a Nobel Peace Prize in 2006 for his work
Going mainstream – online lending such as Kiva.org and the support of major banks such as Credit Suisse
- Microfinance in the U.S. – Seeing the need to support microentrepeneurs in the U.S., organization such as ACCION International helped launch offices in the U.S. in 1991.
Today, ACCION USA is serving microentrepeneurs nationwide.
The Underlying Philosophy Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.
ACCION USA - Our Mission As a leader in U.S. microfinance, ACCION USA empowers low-to-moderate income business owners through access to capital and financial education. With economic opportunity, these entrepreneurs—often minorities and women—can build assets, better provide for their families, create employment and strengthen their communities.
Fast Facts about ACCION USA
Pilot program in Brooklyn, NY in 1991
New York, Boston, Atlanta, Miami and Internet loans
$500-$50,000; average $6,000
Historical Repayment Rate:
Over 90% repayment
Microenterprise Market in the U.S.
22 million businesses owned by microentrepreneurs in the US
5.13 million women-owned businesses
2.5 million minority-owned businesses
4.3 million business owners with personal incomes <$10k*
ACCION USA Portfolio
ACCION USA Portfolio 40% Women 61% Latino 27% African American
The Growing Importance of Domestic Microfinance Microenterprise is a vital part of the US Economy
Microfinance is central to building a strong economy
Microenterprises are more vulnerable to hard times
Meet Josh at Bappin.com
Access to Capital
It is estimated that more than half of all microentrepreneurs in the US lack access to financing for their small businesses
Lack of credit or low credit score
Some industries are considered to be high risk
Lack of financial documentation or records
Business is informal—no commercial track record
Loan amount needed is too small
ACCION USA Lending Impact
Provide alternative to predatory lenders
Create employment opportunities
Increase family income
Generate sustainable businesses
1 Microtest Program Report, FY2008 Performance; 2 Estimates based on direct lending using ATX Impact Study methodology
What can YOU do to help?
Become a part of the ACCION USA high school network
Many small business owners who have not heard about microfinance may be able to benefit from ACCION USA’s services
Participate in the microfinance blogosphere at www.accionusavols.ning.com
Join the ACCION USA fan page on Facebook
Follow us on twitter! Search for hashtags #microfinance and #accionusa
Each loan that ACCION USA generates creates an average of 2.4 new jobs. In microfinance, small amounts can make a huge difference.
3. Start a club at school to do both!
Key resources on the web
2. www.kiva.org 3. http://fieldus.org (The Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination)
Check out ACCION USA’s blog! @ACCION_USA #MifiMon www.accionusa.org/blog
And now… A Quiz!
Name one way that microfinance helps the economy.
What sort of people does ACCION USA typically serve?
What is the average ACCION USA loan size?
How many businesses are owned by microentrepreneurs in the U.S.?
What types of businesses do microentrepeneurs operate?
Who won a Nobel Peace Prize for microfinance in 2006?