Microlending: How ACCION USA Partners With Commercial Banks

This paper describes how ACCION USA partners with commercial banks to offer credit services to microentrepreneurs. In a recent study, ACCION USA found that 82% of US microentrepreneurs had never received a bank loan. Some of them had never applied for one, while others had been rejected by banks they approached.

ACCION USA looks beyond limiting factors such as lack of credit history and collateral, to provide microentrepreneurs with loans.

Currently, more than thirty commercial banks have formed partnerships with ACCION USA. In these partnerships, banks contribute by:

• Referring clients;
• Hosting business training programs;
• Donating office space and market intelligence technology;
• Playing a governance role.

Banks are discovering that microlending is not charity. Instead, they find that it fosters initiative, is good for communities they want to reach and for future customers they hope to attract. Banks benefit by their partnership with ACCION in terms of:

• Obtaining a platform to market themselves;
• Getting a chance to enter new communities;
• Getting connected to minority groups that comprise a large percentage of ACCION USA borrowers.