Document Type

Capstone Project

Publication Date





This paper examines the practice of microcredit in the United States. Chapter I consists of a review of the practice of microcredit in the developing world beginning with the Grameen Bank in Bangladesh. The chapter addresses the arguments that support microcredit as a tool for economic development and poverty alleviation as well as the criticisms of microcredit including the argument that microcredit organizations are unable to achieve the scale and financial sustainability that is necessary for success. The chapter addresses why microcredit organizations have traditionally targeted women as their ideal clientele, and later in Chapter I arguments are presented for and against the idea that microcredit can serve as a vehicle to empower women in developing countries. Chapter II examines the practice of microcredit in the United States beginning with its emergence in the early 1980' s. Common criticisms are addressed as well as the barriers to success that microcredit faces in the United States. The chapter concludes with a framework for evaluation and the examination of three case studies of microcredit organizations in the United States: ACCION Chicago, The Women's Business Development Center and the Women's Self Employment Project. Chapter III concludes the paper with my personal recommendations for the future direction of the microcredit field in the United States, namely that the framework within which micro credit can be expected to be successful must be more narrowly defined than what was previously thought. I assert that empowerment is indeed an effect of microcredit in the United States. I argue why the limited economic benefits of microcredit ensure that an organization's goal of empowerment is the most important programmatic component in terms of potential developmental impact. And finally, I outline the additional programmatic components that maximize the empowering effects of microcredit, using the case studies to illustrate my arguments.