Most of microfinance is focused on providing small microcredit loans to very low-income micro-business entrepreneurs in developing countries. The model has proven to be very effective in helping people help themselves to earn their way out of extreme poverty.

The New York Times profiled some microlenders experimenting in the USA. They note that in 2003 that there were 246 known microlenders most of which were non-profits. These lenders are providing an interesting service in providing credit to very small businesses which generally sit below the level that the federal Small Business Administration is optimized for. These microlenders are able to move more quickly and provide more flexible products which are often critical for entrepreneurs who are often very time sensitive in their needs. Accion USA, a pioneer of microcredit in Latin America, is one of the leaders in this new experiment with average loan sizes of about $5,600.

While it is encouraging that pioneering efforts to help low-income American residents are underway, this article does not point out that none of these microcredit programs are operationally sustainable and I’m not aware of any of them which even have a plan to get to sustainability. Please let me know if anyone is aware of a program which has developed a model in USA or Canada which is on route to sustainability.