To help individuals attain economic independence by advancing educational achievement and entrepreneurial success, consistent with the aspirations of our founder, Ewing Marion Kauffman
Mission Statement, Ewing Marion Kauffman Foundation
There are a number of different ways in which entrepreneurship can be a path to economic independence for individuals. In the United States, 10% of entrepreneurs became entrepreneurs “out of necessity.” For people living below the poverty line, entrepreneurship can offer a way to pay the bills and support a family. In short, entrepreneurship works in different ways for different people.
However, people living in poverty face unique challenges to becoming entrepreneurs, including barriers to financing, external support, and growth opportunities. They may not have access to a mainstream bank or the credit score needed to take out a loan. In addition, they may lack the network to connect with industry professionals and investors. Finally, they might not have secure financial backing to expand their business. Our entrepreneurial financing structures shut out some of the people who need support the most.
To address the needs of these impoverished, budding entrepreneurs, the Grameen Bank, the world’s most famous microlending firm, expanded to the United States in 2008 during the financial crisis. Founder Mohammad Yunus and his team believed that the Grameen model, which relies on small loans, teamwork, and financial training, could be replicated in urban America, and he was eager to help impoverished Americans build credit scores, create businesses, and move themselves out of poverty. He specifically looked to help women, who lead only 16 percent of the country’s employer firms, attain economic independence. While many of the ventures funded by microloans are small, mom and pop shops with no intentions or feasibility of growing, these businesses do have the capability of improving the lives of its founders and employees.
Grameen America is just one example of the organizations across the country seeking to eradicate poverty through entrepreneurship, and provides support that it is a viable solution for many people to combat poverty. The statistics below summarize the impact of Grameen America, as well as the statistics of two other microfinance firms serving the United States.
Size of Loan ($)
Number of Loans Distributed
Jobs Created or Sustained
% of Loans Repaid
Grameen America believes that peer pressure is a driving force in encouraging people to repay their loans, so borrowers work in teams and attend training sessions together.
Accion, The US Network
Though these are individual loans, Accion does provide access to business training and education.
(statistics for GLOBAL impact, not just US)
Kiva is the first online person to person microfinance firm, and it operates through partnerships with local microfinance firms.
While it is easy to get caught up in the appeal of billion dollar ideas, it is important to remember that impoverished entrepreneurs are an important part of entrepreneurship too. Ventures funded by microloans may not immediately stimulate the economy in the same fashion as technology start-ups, but they can allow families to secure economic independence.
Women of Color in Entrepreneurship: New SBO Data and What it Means for the Economy
Top Entrepreneurship Papers of August 2015: What Made the List?
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