Financial Services Project

Low-income neighborhoods are often vibrant places -- strong communities with plenty of entrepreneurial spirit. Unfortunately, the resources are not always there to nurture and grow these tendencies. To help businesses and individuals flourish, diverse, low-cost financial instruments are necessary. These are scarce in low-income communities, and residents end up handcuffed by high costs. These costs, combined with lack of financial awareness, perpetuate the cycle of poverty.

Microfinancing is a concept that has worked in developing countries for some time and is slowly taking hold in the United States. Hundreds of programs around the country work to provide small, low-interest loans, business training, and technical assistance to individuals and groups. These loans help narrow the income gap while building businesses and strengthening communities. The country’s largest lender, ACCION, reports that borrowers have increased their take-home income by 38%, their monthly profits by 47%, and their business equity by 42%.

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