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Micro Enterpreneurs in US

Written by on December 8, 2010 · Leave a Comment

Micro Business is the small business which have an employee fewer than five employees and have startup costs of less than $30.000. The micro business owner known as micro enterpreneurs. There are 22 million micro enterpreneurs in the US. Owners of bakeries, beauty parlors, child care facility, repair shops, arts and crafts shops, small-scale restaurants are people known as micro enterpreneurs.

A lot of micro enterpreneurs sometimes lack the skills important to manage their finance business aspect. The result is, a lot of micro enterpreneurs can’t grow and develop their business beyond a micro enterprise. Presence of Micro Enterprise with their development program have helped micro enterpreneurs achieve great success and growth.

What kind of micro enterprise that could help? The answer is the micro finance company like Grameen Bank in Bangladesh which found by M Yunus. Is it exist in America? The answer is yes it is.

Yet Yunus believes that in just a few years Grameen America will be so successful that it turns a profit, thanks to 9 million U.S. households untouched by mainstream banks and another 21 million using the likes of payday loans and pawnshops for financing. Profit has long eluded U.S. microfinanciers. “If it’s not profitable, it’s not microlending — it’s charity,” Yunus said on a recent trip to the U.S. The question, then, is whether there is a role for a Third World lender in the world’s largest economy.
That was also true when Grameen first came to the U.S., in the late 1980s, and tripped up. Under Grameen’s tutelage, Southern Bancorp started making microloans to entrepreneurs in Arkansas. At first, the loss rate was a shocking 30%. Even after getting that under control, Southern found that what people really needed wasn’t seed capital but broader help developing work skills and finding jobs

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Micro Finance by Grameen Bank

Written by on December 1, 2010 · Leave a Comment

Micro financial is any term used with the process of providing financial services, for example micro credit, small financial savings or micro insurance coverage, to help poor people. By assisting the indegent accumulate usable sums of money, they might grow their own options as well as reduce the many risks they face. As recommended by the name, micro finance, most transactions include small quantities of funds, regularly under $5,000. Some governmental institutions define small finance as volumes below $25,thousand.

Micro finance is usually dated as beginning in the seventies, but earlier experiments in Germany and Quebec have been observed historically. The movements gained momentum in Bangladesh during the early 1970s where Economics mentor, Mohammad Yunus, starting a micro credit company which became the Grameen Financial institution. In 2006, Yunus was awarded the Nobel Peace Prize for his efforts.

Yunus believed in the character and self-respect of every human being. He found every individual being as an entrepreneur and he assumed that, by performing with these very poor people, many people might have themselves out of lower income. From those philosophical beginnings, he began the Grameen Bank in Bangladesh. The Grameen financial institution idea was primarily based on Yunus’ teaching as a good economist as well as his belief that access to funds was the essential component in the poor rising above low income.

This financial institution do was based on a very easy term. The term is one year with weekly installment with the simple 20% interest rate. Every loan application was connected with several borrowers to grow accountability on each other members of the group. So, the healthy of their repayment are keep on track. If one individual lack from repayment, another group member will be held accountable and take the responsibilities.

The Grameen also can increased the loan amount based on the track record of the borrowers.

Because of the culture of the village life, Yunus didn’t ever give any training or detail explaining to the borrowers. In his opinions, it could scare the borrower with the complex theoritical in micro finance.

Nowadays, almost every developing country duplicated what yunus did. Including in Mexico, Indonesia, India and Africa.
What about Micro Finance in America? I’ll post on next post

Categories: Micro Finance

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