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Microlending in the United States MICROLENDING OVERVIEW IN THE UNITED STATES A TIMELINE HISTORY, 1973-2011 Microfinance offers fair and empowering products loans, savings accounts, insurance, and more that help people get ahead financially. Microloans for small business are the most well-known microfinance product. These tiny loans support entrepreneurs who cannot qualify for a bank loan, but need capital and may need business advice to start or grow a business that serves as a primary source of income for the family. Like microlending abroad, microlending in the U.S. often targets women, and also reaches many immigrants, ethnic minorities, and low-income entrepreneurs. Microloans are an effective tool, proven to improve peopleÕ s lives, stimulate economic growth, and have a lasting and positive effect in communities. The history of microfinance in the United States begins in the 1970s, when the need to create an inclusive financial system for the many who lack access to appropriate financial products and services began to get more attention. Communities around the country began experimenting with microlending models to serve untapped markets, building the case for public and private investment in a new style of economic development. The 1990s ushered in a new era of growth for the domestic microfinance industry, driven simultaneously by government policy reforms and increased awareness of the expansion of microlending overseas as an anti-poverty strategy. Over the next two decades, U.S. microfinance continued to pick up steam and scale, providing capital to thousands of entrepreneurs across the nation from cities like Chicago and San Francisco to rural communities, including Pine Bluff, Arkansas and Bozeman, Montana while sowing the seeds for a more inclusive financial system. Today, there is wide consensus that support for microfinance should be a key part of economic development policy in the United States. Opportunity Fund 111 West St. John Street, Suite 800 San Jose, CA 95113 Phone: (408) 297-0204 Web: opportunityfund.org Leading U.S. Microlenders* Twitter: @opportunityfund Listed alphabetically • Access to Capital for Entrepreneurs • ACCION USA • ACCION Chicago • Business Center for New Americans • ACCION New Mexico-Arizona-Colorado • Justine Petersen Housing & Reinvestment Corporation Have an update, correction or addition to this timeline? • ACCION San Diego • Opportunity Fund Please email [email protected] with your suggestion. Opportunity • ACCION Texas • WomenÕ s Initiative for Self Employment Fund developed this timeline as an open sourceÓ document you are welcome to copy and reproduce for your own purposes, but please cite *Source: U.S. Microenterprise Census FY2008 Data, FIELD, The Aspen Institute Opportunity Fund as the original source. We hope to see this timeline grow richer with more content over time. < DESIGN BY: WWW.LOLABERNABE.COM MICROLENDING OVERVIEW IN THE UNITED STATES A TIMELINE HISTORY, 1973-2011 Microfinance offers fair and empowering products loans, savings accounts, insurance, and more that help people get ahead financially. Microloans for small business are the most well-known microfinance product. These tiny loans support entrepreneurs who cannot qualify for a bank loan, but need capital and may need business advice to start or grow a business that serves as a primary source of income for the family. Like microlending abroad, microlending in the U.S. often targets women, and also reaches many immigrants, ethnic minorities, and low-income entrepreneurs. Microloans are an effective tool, proven to improve peopleÕ s lives, stimulate economic growth, and have a lasting and positive effect in communities. The history of microfinance in the United States begins in the 1970s, when the need to create an inclusive financial system for the many who lack access to appropriate financial products and services began to get more attention. Communities around the country began experimenting with microlending models to serve untapped markets, building the case for public and private investment in a new style of economic development. The 1990s ushered in a new era of growth for the domestic microfinance industry, driven simultaneously by government policy reforms and increased awareness of the expansion of microlending overseas as an anti-poverty strategy. Over the next two decades, U.S. microfinance continued to pick up steam and scale, providing capital to thousands of entrepreneurs across the nation from cities like Chicago and San Francisco to rural communities, including Pine Bluff, Arkansas and Bozeman, Montana while sowing the seeds for a more inclusive financial system. Today, there is wide consensus that support for microfinance should be a key part of economic development policy in the United States. Opportunity Fund 111 West St. John Street, Suite 800 San Jose, CA 95113 Phone: (408) 297-0204 Web: opportunityfund.org Leading U.S. Microlenders* Twitter: @opportunityfund Listed alphabetically • Access to Capital for Entrepreneurs • ACCION USA • ACCION Chicago • Business Center for New Americans • ACCION New Mexico-Arizona-Colorado • Justine Petersen Housing & Reinvestment Corporation Have an update, correction or addition to this timeline? • ACCION San Diego • Opportunity Fund Please email [email protected] with your suggestion. Opportunity • ACCION Texas • WomenÕ s Initiative for Self Employment Fund developed this timeline as an open sourceÓ document you are welcome to copy and reproduce for your own purposes, but please cite *Source: U.S. Microenterprise Census FY2008 Data, FIELD, The Aspen Institute Opportunity Fund as the original source. We hope to see this timeline grow richer with more content over time. < DESIGN BY: WWW.LOLABERNABE.COM 1973 Ð 1976 Early Pioneers in Microlending, Midwest ShoreBank Corporation is founded 10,000th loan > in Chicago and begins to provide investment capital to business 1993 owners on ChicagoÕ s South Side who are denied access to credit by Opportunity Fund Opens Doors, the cityÕ s larger financial institutions. San Francisco Bay Area, California WomenÕ s Economic Development in Opportunity Fund, a CDFI, launches after 2008 receiving initial CRA-eligible loan capital Bozeman, Montana is established to ACCION Texas, the largest investments from fifteen Silicon Valley banks. bring women entrepreneurs into the 1980 1995 MFI in the country, makes By 2010, Opportunity Fund will become the mainstream financial system. These Self-Help, CRA Reforms, its 10,000th loan, 2010 two organizations prove in the early Durham, North Carolina San Francisco Bay AreaÕ s leading microfinance Washington, D.C. institution, providing the community with San Antonio, Texas 1970s that disadvantaged communi- Self-Help expands on the model for Community The Clinton administration Microfinance USA, microloans, microsavings, affordable housing ties and small businesses are, in Development Financial Institutions (CDFIs) implements significant reforms to San Francisco, California financing, and financial education. fact, creditworthy. mission-based financial institutions serving the CRA regulation, nearly twenty 2008 As of 2010, the U.S. microfinance undercapitalized markets by offering years after it was first passed. field has emerged. No longer just Grameen in America microloans, business advising, and affordable The reforms shift the focus of CRA pockets and puddles of microlending 1993 Queens, New York housing financing. Self-Help demonstrates that enforcement from process to results, activity, the U.S. microfinance Working Capital, achieving impact in low-income communities and begin to make good on the CRAÕ s Grameen Bank launches its industry now offers proven micro- New England and Nationwide requires something more than microloans. potential to transform banking at the first branch in Queens (NYC), credit and microsavings products, 1986 Working Capital, founded in 1991 and acquired community level. bringing the most well- serving clients across the nation. by ACCION USA in 1995, was the largest known name in international Microfinance USA is the first nation- Microfinance 101, microfinance program in the country in the microfinance to the U.S. wide conference that gathers Manchester, New Hampshire early 1990s, applying their group lending model practitioners, policymakers, The first college course on in New Hampshire, Massachusetts, Maine, and investors and enthusiasts to U.S. microfinance is taught at Vermont and through franchises in Delaware, engage, explore, and expand the New Hampshire College. Miami, and Atlanta. domestic microfinance field. 1973 1977 1980 1981 1983 1986 1991 1993 1994 1995 1997 2008 2009 2010 2011 1981 Women s Economic Development Corporation (WEDCO), 1983 1994 St. Paul, Minnesota 1991 WEDCO puts microlending on the Foundations fund first U.S. CDFI Fund Act passed by Congress, microfinance grantees, ACCION comes to the U.S., Washington, D.C. 2009 map in the U.S., garnering national Nationwide attention on Oprah and 60 Minutes Nationwide Congress establishes the Community ACCION International applies its Kiva launches U.S. partnership, for providing business advising and The philanthropic community, Development Financial Institution San Francisco, California led by The Charles Stewart Mott microlending model (implemented Fund (CDFI Fund), which provides microloans to Midwestern women. Kiva, the worldÕ s first personal 1977 Foundation and The Ford Foundation, internationally since 1973) to the U.S., government investment directly micro-lending website, partners
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