A new report from the Filene Research Institute explores the opportunity for credit unions to form lasting partnerships with small business through microlending.
The report, “Microloan Feasibility Study: Can Small Business Lending Become Big Business For Credit Unions?” is authored by Dave Grace, managing partner of Dave Grace & Associates, and former senior vice president of the World Council of Credit Unions.
The microlending efforts of three credit unions are profiled in the report: The Queen’s Federal Credit Union of Honolulu, Hawaii, Aloha Federal Credit Union, also in Honolulu, and JetStream Federal Credit Union of Miami Lakes, Fla.
In addition to highlighting market conditions, the Filene report also highlights borrower demand, and lending characteristics that suggest microloans and credit unions might be well suited to one another, Filene said.
Small business owners often struggle to obtain credit from large banks, and there are fewer and fewer community banks around to fill these borrowing needs, according to Filene.
“Today's small businesses are tomorrow's big businesses,” Filene said. “Your loan to a small business owner can not only keep that person in business now, but be the foundation of a lasting relationship as the business grows and prospers.”