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ACCION Texas Paves the Way for Impactful Microlending in the U.S.

Microlending in the U.S. you say?

The United States is one of the most unequal countries in the world with regard to income. The statistics are staggering: America’s top 10% of income make 4/5 of the total income earned in the U.S. That leaves 90% of the population to split the rest. It is a unique and unfortunate quality of the United States to have low income communities living next door to so much inaccessible wealth.

Accion uses microlending to change this. Without a credit history or collateral, millions of Americans are excluded from borrowing capital to start their businesses. Accion provides loans to people in the U.S. who are excluded from accessing this wealth of capital.

Microlending in the U.S.:

  • creates jobs
  • promotes income stability
  • benefits children who become more likely to pursue higher education when family income grows

Promise Loans Reduce Inequality

Accion gives out Promise Loans, which are small loans given to clients who need help building credit. Promise Loan clients take a business aptitude test that an automated system analyzes to determine whether or not the clients are likely to repay the loan. As the screening process improves, defaults are decreasing.

Default rates for Accion promise loans are still higher than average. But it’s for a good reason. Accion chooses to accept clients who need the most help and, in doing so, assumes higher risk. Kiva believes in Accion’s mission. Kiva lenders provides risk tolerant capital that helps Accion continue its Promise Loan program. 

So far, Accion has distributed over 800 loans since beginning the promise loan program in January 2013.

Takalya owns a medical transit business that drives senior citizens to their doctors appointments.  My husband takes care of the elderly and you’d be surprised how many seniors don’t have someone available to take them to the doctor,” Takayla said. “It’s really sad.”

Honorio recently opened Mi Lindo Oaxaca Restaurant in Dallas, Texas. The name of his restaurant and cuisine he serves is reflects the love he has for his family and home city of Oaxaca, Mexico.

Learn more about Accion Texas here!


About the author

Audra Wingard

Audra just graduated from UC Berkeley with a degree in Anthropology and Education. She was first introduced to microloans during a trip to Oaxaca, Mexico where she toured a group of small businesses local women had started using microloans. She was inspired by the excitement these women had about their businesses and the successful profits they were already gaining from them. Audra wants to work for Kiva and help motivated people overcome financial obstacles and achieve their dreams. During her time at UC Berkeley she volunteered in a number of schools and education programs in Oakland and San Francisco and loves to work with kids. She plans to go to graduate school for International Educational Development. and hopes to eventually work internationally to help increase access to education.