JUDY WOODRUFF: Today's action by the Federal Reserve, as we said earlier, is aimed at making it easier for businesses to borrow and then spend money.
Our next story is about another effort to help business owners, in this case, low-income American entrepreneurs who are just getting started.
Special correspondent Fred de Sam Lazaro reports on bringing an approach that's worked well in developing countries to the U.S.
A version of this story aired on the PBS program "Religion & Ethics Newsweekly."
FRED DE SAM LAZARO: The billboards and signs in the Jackson Heights section of Queens, N.Y., reflect dozens of languages, cultures, and nationalities. It's an immigrant community of rich diversity, but also plenty of poverty. And there's a store for that, too: an American version of Bangladesh's famous Grameen Bank.
No fancy lobby here -- there aren't even enough chairs. But from this and five other cramped quarters in Queens and as far away as Oakland, Calif., Grameen America disburses dozens of micro business loans each day -- most for around $1,500, all of them to women, who studies show are more likely to repay loans and to spend money on their children's welfare.
It is the brainchild of Nobel laureate Muhammad Yunus, whose Grameen Bank has helped millions of women entrepreneurs in his native Bangladesh. He wanted to test the concept in a developed country.
With foundation grants and borrowing commercially under a federal community reinvestment law, Grameen America began in 2008, to wary customer reception, says CEO Stephen Vogel.
STEPHEN VOGEL, Grameen America: They were afraid that what we were offering -- a low-cost loan, no collateral, no credit scores, no history necessarily of being in business, and we would give them a loan -- they were afraid that there would be something that was going to come back in the end.
It would be, we'll raise the interest rates, we would do something. But we didn't.
FRED DE SAM LAZARO: But word spread quickly, he says. Already, many borrowers, like Maria del Socorro, have paid off first and second Grameen loans.
Del Socorro, a Colombia native who had only had housekeeping jobs before, opened her decorations business. She's fulfilling a lifelong goal to turn her crafting skills into a business. Business is good and growing, she says.
MARIA DEL SOCORRO, small business owner (through translator): It's good. I do all kinds of events, like birthdays, first communions, weddings. All the foam work you see is done by hand. I do all of this by hand.
FRED DE SAM LAZARO: She is among 11,000 women who have received loans from Grameen America, says operation chief Shah Newaz.
When you were starting out in Bangladesh working for Grameen, did you ever dream that you'd be working with poor people in the United States of America?
SHAH NEWAZ, Grameen America: No.
SHAH NEWAZ: It is the world's biggest -- richest country of the world. And the formula we developed, that is the poorest country of the world.
STEPHEN VOGEL: The United States is a country that everyone thinks has money, doesn't have any poor people. We have 40 -- more than 45 million people living in poverty in the United States.
FRED DE SAM LAZARO: And he says it takes much more than financing to help them break out of it: business counseling, keeping the books, paying bills, even opening savings accounts, which is required of borrowers.
Even that is often not enough. Joe Selvaggio, a former Catholic priest who's worked for decades with poor people, says many would-be entrepreneurs fail because their finances are precarious.
JOE SELVAGGIO, MicroGrants: The car got impounded or they got sick or their kids got sick or their landlord. One time, we gave a check to somebody, and they ate up almost the whole $1,000 with bank overdraft charges.
FRED DE SAM LAZARO: Selvaggio runs MicroGrants, a Minnesota nonprofit that works alongside those who provide microloans. But he says new entrepreneurs often need something more to get them over the hump.
So he gives them grants of $1,000. Several MicroGrants clients are in Midtown Global Market, located in a long-shuttered Sears Roebuck store in a recovering Minneapolis neighborhood.
JOE SELVAGGIO: A lot of those places already had a $5,000 loan for inventory, but they can't -- they don't want any more loans. They can't make the cash flow, so $1,000 injection of cash is really helpful.
LAURA SANCHEZ, borrower: We used the money for -- like, to fix the store, displays or, like, decorations for the store.
TRUNG PHAM, borrower: What we used the MicroGrants dollars for at the time for more signage.
MARTIN AKINSEYE, borrower: I used it to purchase about 30 handmade Senegalese drums, which we use to offer free drum lessons every Sunday.
FRED DE SAM LAZARO: Salvador de Montesinos works as a masseur and part-time cook to make ends meet. His $1,000 grant brought him closer to the goal of earning a living as an artist. He was able to buy a machine to make prints, which are much easier to sell than his very high-priced originals.
SALVADOR DE MONTESINOS, Borrower: This is $140. And this is $70,000.
FRED DE SAM LAZARO: Tell me that again?
SALVADOR DE MONTESINOS: One hundred and forty dollars, and $70,000.
FRED DE SAM LAZARO: Some day, he hopes to live off sales of originals.
So you've sold three originals so far?
SALVADOR DE MONTESINOS: Yes.
FRED DE SAM LAZARO: Over how many years?
SALVADOR DE MONTESINOS: In all my life.
FRED DE SAM LAZARO: Well, surprise, he sells about 10 times that number of the cheaper prints per year.
One MicroGrants client who's closer to her lifelong goals is Shantae Holmes. She opened a laundromat in Minneapolis's economically depressed North Side two years ago, a community she's deeply committed to.
SHANTAE HOLMES, borrower: I wanted a business that served a need, not a want. I didn't want to compete with the cell phone places. I didn't want to compete with the red hair and fake hair and all of that stuff. There is enough of that. I didn't want the bargain clothing or gym shoes.
FRED DE SAM LAZARO: Her business began with small loans, but the real source of stability and profit come from a six-figure U.S. Army contract to service a Minnesota-based unit, also help from Jamara Cheek, who is with nonprofit that helps minority entrepreneurs.
JAMARA CHEEK, Metropolitan Economic Development Association: She had no experience with government contracting. People are overwhelmed and daunted by government rules and regulations.
And we literally held her hand and coached her through that process. It took four months after submitting an offer of her services to the government for her to hear back from them.
FRED DE SAM LAZARO: However, the huge volume of new business required a commercial truck she could not afford. The $1,000 down payment assistance from MicroGrants salvaged her major contract, she says.
SHANTAE HOLMES: It takes money to make money, so, therefore, it was like, oh, I need some help to be able to get my bills at a zero balance. And Joe came in and made it easy for me.
FRED DE SAM LAZARO: For Joe Selvaggio, Holmes is a star client -- a 41-year-old mother of three who was able to turn around an earlier life of chemical dependency and cancer.
So far, Selvaggio has disbursed more than $2 million in $1,000 grants. He gets funds from foundations and many wealthy Minnesotans he got to know from his days as a priest.
JOE SELVAGGIO: These are entrepreneurs that have made money, you know, on their own,
And they appreciate the, you know, principles of responsibility, accountability, production, getting, you know, business principles of delivering a quality product on time at a reasonable price.
FRED DE SAM LAZARO: Grameen America's CEO, Vogel, himself a successful entrepreneur who also founded a private equity firm, says it's critical that small enterprises be nurtured among low-income Americans. It's not just the best bet for people in poverty, he says; it's often the only option.
STEPHEN VOGEL: They can't get a job. Jobs are very tight. Overtime is very tight. Many of our borrowers do have jobs. They have part-time jobs, and they're using these business opportunities to increase their income.
FRED DE SAM LAZARO: With its careful oversight and counseling, he says Grameen America's loan repayment rate has been 99-plus percent -- far better than anything seen in big commercial banks.
JUDY WOODRUFF: Fred's reporting is a partnership with the Under-Told Stories Project at Saint Mary's University in Minnesota.