Lessons and Trends of Microcredit in the United States

This paper discusses the development of micro enterprise in the United States. It details the:

• History of microcredit in the U.S.;
• Size and characteristics of the micro enterprise market;
• Current status of the micro enterprise sector;
• Summary of the ACCION experience in the U.S.

The paper discusses the following trends in microcredit in the U.S.:

• A large number of diverse, and often small, organizations providing services to micro entrepreneurs in their local communities:
  • These have specialized purposes and training services dealing with specific populations;
  • They are small in their outreach, but efficient in their delivery of service.
• Two general groups of service providers - those who offer credit and financial services and those who offer training and technical assistance.

The paper also lists the lessons learnt as:

• Too many organizations in the micro enterprise field;
• Very high cost of delivery of services;
• Expensive and labor intensive training service methodologies of most organizations;
• Technology not utilized efficiently by the micro enterprise field;
• Inadequate and inconsistent statistical data on program performance;
• A lack of regulation and accreditation in the field;
• Future funding a challenge.

The paper concludes with the recommendation that the micro enterprise field must turn into an industry, which would have the following qualities: standardization, accreditation, specialization, professionalism, consolidation, innovation and sophistication about the changing needs of its customer base.