Harder+Company Community Research, Accion in the U.S., and Opportunity Fund
First published April 2018
For more than 25 years, Accion and Opportunity Fund have offered business capital and advice to the small businesses often left behind by conventional lenders —women, ethnic minorities, and entrepreneurs with limited income, little or no collateral, or imperfect credit. This type of mission-based, small-dollar lending has grown in recent decades with the recognition of the strong repayment profile of these small business owners and the realization that small business lending acts as an economic development engine.1 Mission-based lenders like Accion and Opportunity Fund do more than lend money; they often work with entrepreneurs to strengthen their businesses and help them succeed through business advising, financial education, and other services.
To date, measuring the success of this type of lending has generally focused on gathering such quantitative data as loan repayment rates, business survival rates, and job creation rates. While important, such results do not tell us about the social impact of these loans on household and family life, poverty alleviation, or community development.
The Longitudinal Impact Study of Accion and Opportunity Fund Small Business Lending in the U.S. is a first-of-its-kind national, longitudinal, qualitative examination of these outcomes. It reports on a nationwide cohort of 350 Accion and Opportunity Fund borrowers who were followed for as long as three years post loan in order to understand the impact of small business lending services on their businesses, their personal financial security, and their overall quality of life. The study examined how business owners define success and how access to capital supports their goals. Findings from this study not only identify opportunities for lenders to better meet the needs of entrepreneurs, they also provide evidence to other lenders, policymakers, and small business supports about the ability of micro- and small-business lending to transform lives.