Microcredit has gained increasing attention over the past decade as a tool for spurring grassroots entrepreneurship in the United States. Although some prominent microcredit programs have reportedly demonstrated positive economic effects on microloan recipients, many others have suffered from various social, financial, and administrative challenges. The authors examine these challenges by drawing on existing studies and their own in-depth analysis of two of the oldest microcredit programs in California. The authors conclude by discussing possible strategies for addressing these problems.
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