| This dissertation examines the rationale, repayment performance and sustainability of microcredit programs in the United States, many of which seek to replicate the credit delivery strategies of such Third World programs as the Grameen Bank and ACCION International.;A survey of small scale entrepreneurs from the Los Angeles area who had been declined bank loans revealed that capital was not the only constraint to entrepreneurship development. Lack of management skills and sales also created major barriers, especially for Hispanic entrepreneurs. Further, access to capital was hindered by problems related to credit, collateral, business profitability, planning and management skills, especially among African-American, Asian-American, Hispanic and women entrepreneurs. It is recommended that enterprise development programs provide entrepreneurs with access to assistance in venture-feasibility analysis, marketing and sales, and small business management.;An analysis of four microcredit programs in the Los Angeles area indicated that higher educational levels and physical proximity of borrowers to the lending agency increased loan repayment rates. Lower levels of borrower transaction costs and higher levels of fear-of-sanctions also enhanced loan repayment. It is recommended that microcredit programs increase their focus on building the entrepreneurial capacity of individuals by providing them with access to appropriate education and training, on recruiting and serving local entrepreneurs, on eliminating bureaucratic and inefficient management practices, and on punishing defaulters through legal action and nonprovision of future services.;Finally, the dissertation argues that many microcredit programs were not sustainable in the United States because of problems in financial, social and administrative intermediation. It also provides a technical assistance framework for building the capacity of future initiatives. Further, the dissertation recommends that instead of simply supplying capital to promote enterprise development on a fragmented, firm-by-firm basis, future efforts in economic development should focus on supporting high-growth industry clusters and on devising strategies that can help entrepreneurs overcome financial and nonfinancial constraints to venture start-up and growth. |
