In the USA, messaging about microfinance focuses less on “lifting people out of poverty” and more on “helping small business owners access capital.” The microfinance clients served here in California are usually low to moderate-income entrepreneurs who cannot access bank capital for various reasons: they may lack a credit history, they may face cultural or language barriers, or the amount they need may be too small for a bank to touch.

Other differences between domestic and international microfinance include increased technical assistance, lower interest rates, and matching savings programs.

As I mentioned in a previous post, it can be difficult to find clients who fit this profile and pose an acceptable credit risk. To make matters more complicated, U.S. microfinance institutions are operating in a space that is already saturated with financial service providers.

One of my side projects here at Opportunity Fund is to learn about the “competition” and how they are advertising small loans. What sort of messages are potential clients seeing?

I began by researching microlenders in my own backyard, the Mission District of San Francisco. The Mission is an important neighborhood for Opportunity Fund because of its large immigrant population and the high number of microenterprises.

A recently published report, “Just the Financial Facts, Please!” from the Mission Asset Fund analyzes the various banks, credit unions, not-for-profits, and payday lenders that serve the neighborhood. Did you know that there are at least 57 different financial service providers in this 1.9-square-mile neighborhood? That’s a lot of noise.

I highly recommend reading the full report, which also provides “Financial Facts” labels to help consumers make smart choices on small loans.

In the next few weeks I’ll be talking to Opportunity Fund clients about our messaging and photographing the various financial services providers in my neighborhood.

One of my favorites thus far is this advertisement for payday loans:

Casey Koppelson is a Kiva Fellow (KF12) at Opportunity Fund in the United States. This fall she is headed to the Philippines, where she will interview borrowers, gather data for CERISE, and track down her long-lost uncle.

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