Microfinance services are not only in the developing world. There are unbanked entrepreneurs in our own communities or just off our college campuses. In the U.S., 1 in 12 people (17 million) does not have a bank account and 1 in 4 is underbanked according to the FDIC.
Domestic microfinance institutions (MFIs) have begun popping up to meet the need.
While in Washington D.C. we met up with one of these unique groups, the Hilltop Microfinance Initiative, to explore the benefits and challenges facing domestic lenders. Hilltop provides small loans and business consulting to low-income residents of Columbia Heights, D.C..
It’s also founded and run entirely by Georgetown students.
It’s a win-win. The organization’s directors, Alissa Orlando and Alex Honjiyo, explained to us that they are able to help spur the local economy by providing much needed access to loans while at the same time learning valuable skills about how to manage their own social business. And its all done while in college.
There are now 14 student MFIs around the U.S., using the skills, time, and enthusiasm of college kids to make a sustainable impact.
To begin lending on your campus, these resources will get you started: http://www.CampusMFI.org
To learn more about the domestic microfinance industry, I’d suggest a few places:
- Take Sean Foote’s online Microfinance Class.
- Watch the film To Catch a Dollar. It provides an in depth and heartfelt look at Grameen America microfinance in Queens N.Y.
- Read this overview of domestic lending by Accion.
Do you think microfinance can work in the U.S.? Let us know your thoughts.