Microenterprise Development in the United States: Closing the Demand Gap

This paper reports the key findings of studies carried out by ACCION to explore the demand gap that exists between the number of micro entrepreneurs being assisted and the overall number who might need assistance. It also lists some of the changes that ACCION has made in its programs to address these findings.

The research gathered information about various topics and the key findings were:

• Micro entrepreneurs did not see banks as a viable option to finance their business;
• Participants expressed insecurity about their knowledge of how to start-up and run a business;
• Where credibility of an organization was concerned, participants wanted an entity that was professional, well-established and would serve their community;
• In an ideal loan company, micro-entrepreneurs looked for:
  • Low interest rate;
  • Company where the application process was simple;
  • A wide range of loan amounts.
• They were unaware of community-based lenders in their area, and there was low awareness of ACCION.

ACCION's marketing strategies to address the findings were:

• Establishing trust and a welcoming environment;
• Making operational changes:
  • Changing the interest rate structure,
  • Educating the customer,
  • Diversifying the loan products;
• Strengthening its image in the community;
• Creating greater awareness in the target market:
  • Becoming more customer-driven and actively seeking out customers,
  • Increasing the marketing and outreach budget.

The paper concludes by listing challenges that ACCION will face in the future.