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How For-Profit Lenders Are Serving Microentrepreneurs

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Mar 2011, Gomez, L. & Edgcomb, E.

Examining the microenterprise finance landscape in the U.S

The paper examines the landscape of financial access for microenterprises in the U.S. in the aftermath of the financial crisis. It observes that the funding scenario has changed drastically after the crisis. As funding dried from traditional sources, a number of for-profit organizations working in the retail financial services arena began to fill this void by offering microloans to microbusinesses.

The paper analyzes the approach that for-profits have taken with respect to methodologies, the use of technology, product and pricing features. It explores the impact of the changing market place and emergence of ‘new players’ on the non profit lending industry, in terms of:

  • Overlaps in target markets between existing non profit and emerging ‘new players’;
  • Lessons in Scale Up that nonprofit microlenders can learn from the experiences of for-profit lenders;
  • Opportunities that might exist for collaboration between non profit and for profit lenders.

http://www.microfinancegateway.org/gm/document-1.9.50636/ForProfitLenders-publish.pdf

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