U.S. microfinance, Let’s see.

7 April 2009 at 07:57 9 comments

The other day in the Mission district at Kiva headquarters in San Francisco, I converged with three micro enterprises, on just one corner. A young man selling fresh oranges, a Popsicle and ice-cream cart vendor, and another man with a tall stick of cotton candy- $2 each. Although this coincidence is quite novel, it does explain another, larger phenomenon. Perhaps the true impact of small businesses in the U.S. is underestimated. AEO, the association for Enterprise Opportunity, says that 87% of all businesses in the U.S. are microenterprises, businesses with fewer then 5 employees.
As a fellow, Kiva has given me the opportunity to research U.S. microfinance as they look into expanding into the U.S. market. The Mission district for example is one of the most culturally and economically diverse neighborhoods in the U.S. There exists an interconnected community of businesses, many of them reminiscent of microenterprises I’ve seen traveling in the developing world or even on the Kiva website for that matter. It’s made me second guess why I hadn’t come here to study Spanish and Latin American culture- unarguably I would have had the most diverse experience possible.
In San Francisco, Denver, Omaha, Detroit and New Orleans there are all types of fascinating microenterprises. Businesses owners with retail shops, cosmetics sales, arts and crafts, janitorial services, and food vendors- just to name a few. Many of these businesses are using microfinance to get started and to get ahead. The backbone as U.S. businesses are sometimes referred to is asking for some reinforcement in a time of hardship. It may be microenterprise that helps tone the future of business in the U.S. Lets see.
Over the coming months of my Kiva Fellowship, I will continue to research U.S. microfinance on many different levels in several U.S. cities. Take a look at the video I made while in San Francisco’s Mission district. I will be continuing my research in New York City, so stay posted for more on U.S. microfinance.


Link to Video-


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Contradictions, Complications, Juxtapositions, and Genocide Loan Officers: The Unsung Heroes of Microcredit


  • 1. max nadel  |  13 October 2009 at 10:14

    Hi folks,
    it’s me again. I have to correct my web adress.
    It ishttp://www.nesseq.com!
    In my web site are also ideas how to fight the Climate Change. An important aspect of it is Self-Help and Micro-Financing. Enjoy!

  • 2. Max Nadel  |  12 October 2009 at 11:18

    Hi folks,
    I want to introduce here a new way of Microfinancing.
    It is called the Loan-Guaranty-Fund (LGF).
    1.000 people in one town each invest 1.000 Euro or US-Dollars for 10 years and use the interest yield as a collateral for loans.
    For more information visit http://www.nsseq.com!

  • 4. Marshall Maher  |  9 April 2009 at 10:39

    There’s a whole big swath of America between San Francisco and New York – take a look there too. You’ll find rural remote people in the U.S. fall back on their communties for loans, etc. – just like Africans do (well, in savings-based microfinance). Look forward to reading it.

  • 5. erica dorn  |  8 April 2009 at 09:06

    Thanks for your responses. You’ve made a really interesting point. Obtaining microcredit the U.S. generally involves legitimizing your business and would certainly be the case with any microfinance institutions partnered with Kiva. Many institutions do generally subsidize the additional costs needed for business training and planning. It will be interesting to continue exploring these differences between US and international microfinance.

  • 6. Dan  |  8 April 2009 at 08:00

    You say, “Fortunately many microfinance institutions in the US also incorporate these necessary programs.”

    However, unless they are willing to also subsidize the cost, these extra costs bear directly on the economic success of the entrepreneur. Taking a highly public loan through Kiva is a serious threat to remaining in the underground economy. It will be interesting to pencil out whether getting micro-credit will be enough of an advantage to offset the compliance costs of leaving the underground economy.

  • 7. erica dorn  |  8 April 2009 at 07:42

    Some of the fundamental differences between US microfinance and international are the additional business skills, training, legalities involved. Fortunately many microfinance institutions in the US also incorporate these necesary programs.

  • […] Kiva starts to research U.S. microfinance as they look into expanding into the U.S. market; http://tr.im/iquR   […]

  • 9. Dan  |  7 April 2009 at 18:17

    We live in an area of the US where jobs are hard to find–even in normal times– so people become entrepreneurial to make a living. A “one-man-show” type business has its level of bureaucratic regulation which becomes the floor expense to be in business legitimately. Many seek to avoid this “floor” and keep in the underground economy. I’d be curious to know which of the entrepreneurs you encountered were “fully licensed and in compliance”. These can be overcome with enough income generation, but it still is an obstacle.

    Grow to the size where you need to add even one employee and the whole book of regulations and compliance is thrown at the employer. Perhaps this is because both the government and most people think of employers as big and quite capable of handling all this extra paperwork.

    These are serious impediments to micro-enterprise– at least the above-board, fully legitimate ones.

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