When most people hear “microcredit” or “microfinance,” they think of efforts to addressing poverty in the developing world, as in the village banking model popularized by Grameen Bank in Bangladesh and others. The United Nations designated 2005 the International Year of Micro-credit, and Muhammad Yunus, founder of Grameen Bank, won the Nobel Peace Prize in 2006.
Many groups are trying to see how the microfinance model can be applied in the U.S. and other industrialized nations. Global microfinance institution ACCION has been working in the U.S. since 1991, and even Grameen has begun working in the New York City.
Organizers of the Microfinance California 2009 Conference recently sent me information on the meeting on May 28 that you may want to check out if you’re interested in these issues. There is a webcast of the event if you can’t make it to Stanford next week.
On a recent visit to Bolivia, I saw first hand how these types of programs – especially when coupled with training and other human development activities – can help move people out of poverty. There is currently a lot of debate in the sector about whether microfinance should be a non-profit or for-profit activity. For a great outline on these debates, see the New Yorker article, “Millions for Millions,” from 2006.
One thought on “Can microfinance work in the U.S.?”
Are you familiar with the Community Financial Resource Center in South LA (www.cfrc.net)? They provide micro, small and mid-size loans to lower income Los Angelinos. They have an abundance of interested loan applicants, but the repayment rates are so much lower here.
Now more than ever, it would be amazing if someone could figure out how to make the lending circle concept, or something like it, work here in the US.
I’ll definitely check out the webcast from the Microfinance CA 2009 Conference. Thanks for the tip!