Nonprofit research organization MDRC and Grameen America, Inc., the fastest growing nonprofit microfinance organization in the United States, today released the early results of a research study, Microfinance in the United States: Early Impacts of the Grameen America Program. The study, funded by Robin Hood, is the most rigorous, independent, third-party evaluation of group microfinance in the United States, assessing Grameen America’s program, a microfinance model that provides small loans to low-income women entrepreneurs in the United States seeking to launch or expand small businesses.
Resource Category: Microlending
Women in The CDFI Industry
FUND Community Institute continues to engage in dialogue and analysis around data from its landmark study, Perception versus Reality: Women and Change in the CDFI Industry (available at www.fundci.org). This month, we examined the prevalence of women as leaders of CDFIs, and how this role may have changed since the founding of the industry. The findings suggest that women are playing leadership roles in large numbers (although not at all sizes and types of CDFIs) and that the organizations they head up may be leading the way in fostering more inclusive, family-friendly work environments.
Before Getting An Online Business Loan
Simply put, the purpose of this e-book is to help you fully understand what taking on an online loan truly involves and how it can impact your bottom line.
While many money guides are loaded with jargon and confusing language, we break down everything you need to know into easy-to-grasp terms and examples based on real-life situations.
2017 Nonemployer Firms Credit Survey
Nonemployer firms are important to the United States’ economy, comprising 81% of all small businesses, employing 17% of the American workforce, and generating $1.2 trillion in annual sales. While previous research has explored why individuals seek self-employment or what conditions drive nonemployers to become employer firms, less is understood about the financial experiences and challenges of nonemployers—namely, whether or not nonemployers are succeeding financially.
Growth & Evolution of CDFI Partnerships
The Federal Reserve Bank of Richmond has researched developments in the community development financial institution (CDFI) industry on a regular basis since the 2009 inaugural launch of the biennial Survey of CDFIs in the Southeast.
Lending in Underserved Markets
The contribution and importance of small businesses to the nation’s economy is well-researched and understood; for minority-owned small businesses, the impact and significance are even greater. Not only do minority-owned small businesses help drive job creation, raise wages, and elevate better standards of living, they also offer a critical pathway for Black and Hispanic populations to close the racial wealth gap. An increase in entrepreneurship among people of color can create income for both entrepreneurs and the people of color who work at the businesses. Yet, starting a new firm or growing an established business requires capital, and Black and Hispanic businesses have higher barriers to accessing capital.
Analysis of States’ APR Caps
This National Consumer Law Center report examines the annual percentage rate (APR), including both interest and fees, allowed in each state and the District of Columbia for a $10,000 five-year loan. An APR cap is the single most effective step states can implement to deter abusive lending and ensure that families are not caught in a debt trap that’s nearly impossible to escape.
Credit Experiences of Minority-Owned Firms
Given the relationship between a small business’s access to financing and its outcomes, and given the growing share of minorities in the U.S. population, it is important that creditworthy firms and entrepreneurs, irrespective of race or ethnicity, are able to secure adequate financing to achieve growth and success. Data from the Federal Reserve System’s 2016 Small Business Credit Survey allow for a closer examination of the experiences of minority-owned small businesses in applying for and obtaining financing.
Small Business Lending in the U.S.
The growth and survival of U.S. small businesses depend on how depository lending institutions and other financial intermediaries are attending to the credit needs of small firms. The financing and credit needs of small firms vary by business size, type of lender, business owner, and age of the business. Thus, all these components tend to contribute to the challenges small firms face when seeking access to credit. Nonetheless, 99.7 percent of firms with paid employees are small businesses, employing 47.5 percent of the private workforce in 2015 (SBA Advocacy, 2018). These tenacious businesses accounted for roughly 40 percent of U.S. private nonfarm output (Petkov, 2016), and for 63 percent share of net jobs between 2010 and 2016 (SBA Advocacy, 2017). This study predominantly uses public sources of information on U.S. banks to analyze the patterns in small business lending by evaluating aggregate data of depository lending institutions.
Fintech Investigative Report
Last year, Congressman Cleaver launched a groundbreaking investigation into the small business lending practices of Financial Technology (FinTech) companies, studying the various methods companies use to protect against discriminatory practices. One of the primary concerns raised by Congressman Cleaver was the specific algorithms used by FinTech firms. While many FinTech firms claim these algorithms protect against discrimination, they have generally provided little evidence into how they are utilized to do so. The questions surrounding the algorithms are particularly troubling because, in some cases, they have the ability to utilize certain information about loan-seekers without their knowledge. Information collected can come from a wide range of sources, including the loan seeker’s Twitter or Facebook profiles, specifically who they follow, and the number of criminal records and/or bankruptcies in the loan seeker’s zip code. Not only is this information unrelated to the purposes of loan-seeking, it can be used to discriminate against certain people, predominantly lower-income borrowers and people of color. The following report includes the detailed findings of Congressman Cleaver’s investigation.