MicroEnterprises and MicroLending

Although I knew about these 10 years ago, the information got hidden in this tissue mass I call a brain. This seems like a VERY sustainable practice as I re-view how it works. I'm interested in what y'all have to say on the subject.

There is a large group in Asheville, NC named Mountain Microenterprise who loan to tiny businesses at reasonable rates. All the funds are private so there is no large corporate lending (rates) and dictates, and all loans are managed by a small peer group of 10. No one else in a group can get a loan until the first person pays off his/her loan and first loans are limited to $5,000. The Fund provides free business help for structure, accounting, marketing, etc.

Several nights ago I watched a PBS show on the subject. In this show, most enterprises were 3rd world countries, and most of the lenders were from the US, putting in just a small amount of personal money. The loans were generally not over $500, there has never been a default since their program began, and most loans are repaid ahead of schedule. One thing many funders experienced was a personal involvement with the new enterprises... seeing the business prosper and grow, and getting to know the proprietors... usually via email with photos.

A quick search today on Google shows many states with microfunding groups; unfortunately the government has now also entered the field.