TO OUR CREDIT: BOOTSTRAP BANKING IN AMERICA explores the human dimension of microenterprise development in four very different settings:

NEW ENGLAND

For almost 15 percent of America's workforce, self-employment has become an important income-producing option. Cheryl Taylor, single mother of four in Wolfeboro, New Hampshire, started a clothing consignment shop. But her business was starved for cash, and she couldn't get a loan from a bank.

Banks have been merging to compete in a global economy. As banks have grown larger, they have become increasingly dependent on large loans; the interest from a small loan isn't enough to be profitable.

Cheryl got a $500 loan from Working Capital, one of a growing number of nonprofit organizations which have become microlenders. Collateral is not required; instead, members form small groups and guarantee each other's loans.

We come to realize how important microenterprise is to women. Many choose self-employment as a way to earn income while caring for their children. Three fourths of all microloans in America go to women.

ARKANSAS

The Arkansas delta region bears more than its share of the country's poverty. Unemployment levels are twice the national average; local poverty levels approach 40 percent.

We meet Brenda Kearney, owner of Kearney's Cleaners in Pine Bluff, Arkansas. Brenda needed a loan to upgrade and expand her drycleaning business. She got it from the Good Faith Fund.

But to Good Faith and many other programs in this country, microcredit is only part of the picture. For every two dollars of loan money, Good Faith members require eight dollars of training and technical assistance.

To compete in our high-tech economy, new business owners must acquire accounting skills, knowledge of tax laws and regulations, and expertise in marketing. And, they must out-compete large corporations.

Research by the Aspen Institute indicates that microenterprise can be worth it. A fourth of the microentrepreneurs studied escaped poverty in a three-year period. Almost half had significant increases in assets.

SOUTH DAKOTA

Monica Terkildsen
is a loan officer for the Lakota Fund, which provides loans and business training to members of the Lakota Nation on the Pine Ridge Reservation in South Dakota.

Almost $75 million comes onto the reservation annually; almost all of it flows back out, to border towns outside the reservation. Shannon County is the poorest county in the United States.

We soon learn that Monica's work goes far beyond credit and business training. Members often lack transportation, phone service, and access to raw materials or to markets.

Through Monica, we meet Roselyn Spotted Eagle, who lives in a two-room house with poor heating and no running water. She cares for her grandson, who suffers from fetal alcohol syndrome. Several loans have helped her buy to buy materials and equipment for her beadwork. We next meet Bamm Brewer. Bamm used a loan from the Lakota Fund to build a four-mile-long fence to contain his new buffalo herd.

There are signs on the reservation that personal progress can have larger consequences. In the last decade, the number of storefront businesses has increased from forty to over one hundred. Most have received help from the Lakota Fund.

CHICAGO

The Latino community in Chicago is by far the fastest growing segment of the city's population. Yet, it remains underserved by banks. We meet Jose Rivera, who recently moved with his family to Chicago, from Mexico. He desperately needed money to bid on a drywalling contract; fortunately, he met Accion Chicago.

Accion Chicago is part of Accion International, a network of organizations which have made loans throughout Latin America for over twenty years. Some of them have become self-supporting from the interest on their loans; Accion Chicago hopes to do this as well. Whether it can succeed remains to be seen; even Accion provides its members with personal service that a bank would consider unprofitable.

But research indicates that, even now, microenterprise development appears to be a cost-effective investment. The cost per job created seems well below that of many other job-creation strategies.

As TO OUR CREDIT demonstrates, microenterprise development is not a solution for everyone. And, by itself, it is not likely to turn a community's economic fortunes around. But it can be an important first step.

Perhaps its greatest contribution lies beyond the numbers, in the way it creates not only businesses, but hope.
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