Microenterprise Programs as Asset Builders

This guide highlights the role of microenterprise (MED) programs in the United States in building assets in the form of business equity. The guide states that:

• Assets give poor families a chance to break free from the generational transfer of poverty;
• However, low-income families in the U.S. are asset poor in significant ways;
• They do not have savings or insurance and are excluded from government subsidies of home-ownership;
• MED programs have made building assets, in the form of building equity, a part of their core mission;
• They collaborate with financial institutions, the government, and community development associations to promote matched savings accounts, financial literacy, improved access to credit, and tax benefits for low-income families.

It lists the following initiatives that MED programs are using to bring their clients closer to the financial mainstream:

• Individual Development Accounts (IDAs);
• Financial education;
• Enhancement of access to credit through credit education and repair;
• The Earned Income Tax Credit (EITC).

The guide concludes that funders can aid these initiatives by supporting:

• Matched savings programs;
• Product and service delivery enhancements through which MED programs can expand program offerings and strengthen their asset building capacity;
• MED program participation in collaborative efforts, networks and partnerships that aid service delivery;
• Policy initiatives that create benefits for self-employed microentrepreneurs.