This report summarizes 36-month findings from the evaluation of the Grameen America program, a microfinance institution that provides loans to women with low incomes in the United States who are seeking to start or expand a small business. Its objective is to reduce poverty through the provision of small loans, financial training, and peer support.

Key Findings:

  • The evaluation provides evidence that the Grameen America program contributed to reducing the types of material hardship experienced. The program also produced a positive but modest increase in monthly net income (defined as a woman’s earnings from any business, wage-based job, and other sources, minus business expenses), though the evidence is not as definitive. The difference in net income seems related to higher average earnings from a business. The program did not have an effect on wage-based employment.
  • Grameen America also increased nonretirement savings, increased the likelihood of having a VantageScore (a type of credit score), deepened relationships among members of loan groups, broadened social support systems, and increased overall well-being.
  • The evaluation suggests that the relationship among wage-based work, business ownership, savings, and material hardship is complex. Overall, the evidence suggests that there were several ways material hardship might have been reduced. Increased cash flow from the loans might have allowed women in the program to meet financial obligations and thus reduce material hardship. Increased social support among Grameen America program participants may have reduced material hardship by giving women someone to turn to in a time of need. Increased savings may have given women additional funds to draw on. Increases in VantageScores may also have reduced material hardship by giving women access to other financial products such as credit cards to use to cover expenses. Future research could provide more insights into these complexities.

Read the full article about microfinance by Kelsey Schaberg, Daron Holman, M. Victoria Quiroz Becerra, Richard Hendra at MDRC.