Microfinance in the United States: The Working Capital Experience - Ten Years of Lending and Learning

This paper informs that Working Capital is the United States' largest peer-group lending programme. This article:

• Reviews what Working Capital has learned about the market, its customers, programme impact, and service delivery;
• Presents a model for understanding how participating in peer lending groups develops "social and economic capital" in poor communities;
• Discusses how participants judge the group model as they identify the characteristics of successful groups and the impact of the group on their businesses, on themselves and the community;
• Shows how Working Capital evolved from a start-up operation in a single town into a multistate program;
• Explores the advantages and limitations of rapid expansion.

A checklist for choosing affiliate partners is presented, along with a list of the lessons learned about delivering services though affiliates. To conclude the author notes that:

• Hundreds of microenterprise programmes in North America are reaching less than seventy thousand businesses;
• There is a case for learning from customers on how to set up a microenterprise service initiative as a business;
• This learning could generate new ideas on how these programmes could best be carried out within the context of hard-pressed, low-income communities.