Why have lending programs targeting disadvantaged small-business borrowers achieved so little succes in the United States?

Small business lending programs designed to move disadvantaged low-income people into business ownership have been difficult to implement successfully in the US context. Based in part on the premise that financing requirements are an entry barrier limiting the ability of aspiring entrepreneurs to create small businesses, these programs are designed to alleviate such barriers for low net-worth individuals with limited borrowing opportunities. Our analysis tracks through time nationally representative samples of adults to investigate the role of financial constraints and other factors delineating self-employment entrants from nonentrants. Paying particular attention to lines of business most accessible to adults lacking college credentials and substantial personal net worth, our analysis yields no evidence that financial capital constraints are a significant barrier to small-firm creation

The Issue at the Heart of America’s Great Unbanking

Consumer protection regulation targets services like payday lenders under the presumption that these services can be predatory and associated with high costs. Yet an increasing number of Americans are utilizing such alternative financial services and joining the ranks of the “unbanked” and “underbanked.” Altering this status quo and promoting greater middle-class stability will require that policymakers foster innovation in the development of high-quality, transparent, and consumer-oriented financial services within the mainstream banking system.https://repository.upenn.edu/pennwhartonppi/1046/thumbnail.jp

Checks

In 1940, the first monthly Social Security payment in the form of a paper check was issued. Social Security was established by the United States government as a universal retirement system for workers. The Social Security check became a symbol of the social safety net for older Americans, and the relation of that safety to a lifetime of compulsory productivity. Over the years, there has been much innovation in the physical properties of Social Security checks, as well the systems that produce, distribute, and cash them. The Social Security, check, however, will soon become a thing of the past. With or without their cooperation, recipients are being transitioned to electronic direct deposit systems.</p

Microcredit in the U.S.: An Alternative Economic Survival Strategy

Since the introduction of the first U.S. microenterprise1 program in 1983, more than 100 have been started. They exist in both rural and urban settings, target diverse populations, and maintain different criteria for lending. Their single common denominator is that they all serve as "lenders of last resort" (Mclenighan and Pogge 1991), providing credit to people who want to be self-employed but who cannot obtain credit through traditional channels