Microfinance Goes Where Banks Fear to Tread

Small businesses are turning to nontraditional lenders as banks reject many loan applications following the credit crunch

Microfinance lenders, originally geared to helping the disenfranchised, are providing more financing to small businesses that can’t get bank loans.

While microfinance represents a tiny fraction of the U.S. credit market, it’s growing fast. The industry group Opportunity Finance Network says 56 percent of microfinance organizations last year saw increases in loan applications. Most likely to get funding were “people who were very strong small business owners who in the past would have received financing [from banks],” says Elaine Edgcomb, who studies microfinance at the Aspen Institute.

Read more: http://www.businessweek.com/smallbiz/content/jun2010/sb20100623_254150.htm?link_position=link1

Relevant links: www.microfunding.co.uk

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