When we think of microfinance, we usually tend to first think of it in terms of developing countries. However, microfinance and microlending can have a significant impact on more developed countries in North America and Europe.
ACCION Chicago is an organization that provides access to credit for small business owners that are otherwise denied loans from more traditional banking and finance institutions. Located in Chicago, Illinois, ACCION has made partnerships with thousands of customers, offering loans anywhere from $500 to $25,000 for established businesses. ACCION Chicago also provides Credit Builder loans that range from $200 to $2,500, in order to help those with poor credit history. In addition to its financial services and products, ACCION Chicago offers a wide range of business counseling.
Founded in 1994, ACCION Chicago was formerly an associate of ACCION International, a global non-profit organization, but now is affiliated with ACCION USA, which includes a variety of other ACCION locations in San Diego, Texas and New Mexico.
At ACCION Chicago, clients aren’t just numbers. ACCION’s lending program is determined by character, and not based on collateral, credit or revenue. By using references from customers and suppliers, ACCION Chicago is able to judge a potential client’s dedication to their own business—all on a case-by-case basis.
Interestingly, ACCION Chicago holds impact surveys in order to judge what changes its loans are making on job creation and small business wealth. In a survey of loan recipients from 2007 to 2009, 50 percent of those asked stated they had had a 100 percent or greater increase in business income since they received the loan. What’s more, the businesses have created or maintained 2.6 jobs each, on average.
In many ways, ACCION Chicago is changing the face of what it means to be a microfinance organization in the United States. For the less privileged in the U.S., the highly unequal finance systems are incredibly inaccessible, making ACCION Chicago crucial in order to fill in the missing gaps.
Contact Information:
ACCION Chicago Website
1436 W. Randolph Street, Suite 300
Chicago, IL
60607
United States
Telephone: 312-275-3000
Fax: 312-275-3010
American-Based Microlending
ACCION Chicago Provides Financial Access to Small Business Owners
Trend Themes
1. North-american Microlending - The emergence of new microlending institutions in North America highlight a growing need to give access to financial services to small business owners denied loans from traditional banking and finance institutions
2. Character-based Lending - Lending institutions that focus on using character-based references from customers and suppliers, rather than collateral, credit, or revenue, highlight an opportunity to expand access to credit to hard-working entrepreneurs underserved by traditional banking
3. Microfinance Impact Surveys - The implementation of impact surveys to measure the effectiveness of microfinance loans on job creation and small business wealth highlights the importance of such surveys in the microfinance sector
Industry Implications
1. Microfinance - Microlending institutions in North America are disrupting traditional financial services and providing underserved small business owners with access to credit and financial services
2. Business Counselling - With a focus on improving financial literacy, business planning, and management, business counselling services provided by microlending institutions have the potential to improve success rates for small businesses
3. Non-profit - Non-profits such as ACCION that are dedicated to providing underserved communities with access to credit and financial services represent an opportunity to create social impact while providing a sustainable business model.