Microfinance in Our Backyard <br />Hosted by Grameen America & ACCION USA<br />
The Need for Domestic Microfinance<br /><ul><li>1 in 7 or ~44 million people in the U.S. live in poverty (*28 million of these are women)
20 million microenterprises in the United States, but less than 1% are receiving credit or business assistance
400%-3,000% interest rates are charged by some alternative lenders, such as loan sharks and fringe banks</li></ul>“FY 2008 Program Performance Data Overview”. FIELD: Aspen Institute<br />
Impediments to Domestic Entrepreneurs<br />Loan amounts offered too big<br />Most banks issue loans averaging $194,000<br />There are 700 microenterprise programs in the U.S., 369 have a loan average of $35,000 <br />Poor credit history<br />Min. Required = mid 650s<br />Avg. = mid 750’s<br />Insufficient business history<br />Businesses are start-ups, off the books, initial phases<br />Group vs. Individual<br />Independent business culture<br />Looser ties to community<br />Gender Breakdown<br />Men primary owners of small businesses<br />Barrier to Entry<br />Start up and operational costs are much higher<br />
Grameen America’s Mission<br />To provide affordable microloans to financially empower low-income entrepreneurs:<br /><ul><li>Capitalto invest in a small business to create self-employment
Mentoringand strong support network to build communities
Access to Savings and a path toward establishing a credit history</li></li></ul><li>Grameen America Operational Overview<br />ProvideCapital<br /><ul><li> Low cost loans support income generating activity
Building scores of > 640</li></ul>Develop<br />Financial Literacy<br /><ul><li> Borrowers participate in 5-day training, where</li></ul>they learn loan terms, open savings account & <br />develop business plan.<br /><ul><li> Weekly meetings foster financial education.
Minimum of 55 hours of training</li></li></ul><li>Grameen America Model<br />5<br />2<br />3<br />1<br /> 5 days<br />$<br />Complete training /<br />Start saving<br />Form group<br />4<br />NEW <br />LOAN<br />6-12 months <br />Repay loan<br />
Grameen America Borrowers<br />Live below the poverty line<br />Average income in 2009 was $15,000<br />90% single mothers<br />Interest and determination to start a business<br />Nowadays there are not many jobs out there so someway we need to survive. We’re making it and Grameen America has helped us do that. - Lisette, GA Borrower<br />
Facts about ACCION USA<br />History:<br />Pilot program in Brooklyn, New York in 1991 <br />Locations:<br />New York, Boston, Atlanta, Miami and Internet loans (serving over 46 States)<br />ACCION USAempowers entrepreneurs <br />to invest in their business, family and <br />community through financial literacy <br />and capital.<br />
Exhibit steady cash flow and the ability to support monthly loan payments.
Be able to provide a cosigner, if needed</li></li></ul><li>ACCION USA Impact<br />The business survival rate among ACCION USA <br />clients is 98% for established businesses <br />and 89% for start-up businesses.<br />We create sustainable <br />businesses<br /><ul><li>Lent out $131MM
92% repayment rate</li></ul>On average, each ACCION USA small business<br /> loan recipient creates 3 jobs <br />(including the borrower).<br />We create employment <br />in low-to moderate-income <br />communities<br /><ul><li>30,000 clients served</li></ul>Jobs created by ACCION USA borrowers<br /> pay 33% more ($10.80/hour) than the<br /> federal minimum wage ($7.25/hour).<br />We create fair wages<br /><ul><li>65, 000 jobs created</li></ul>We improve quality<br /> of life<br />Clients reported a 19% median increase in <br />take-home pay in the midst of economic distress.<br /><ul><li>46 states served</li></li></ul><li>Join us at Microfinance USA Conference May 23-24th in New York City! <br /><ul><li>Microentreprenur Client Tours – only a few spots spots left to see microfinance in action!
Social Entrepreneurship and Microfinance with Susan Davis and Jessica Jackley