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%.