Credit in Economically Deprived Communities

Government (federal or state) in the United States, along with most venture capital firms, tend to favor the flow of investment funds to capital-intensive projects undertaken by large firms. Even the federal Small Business Administration (SBA) tends to target entrepreneur projects that, while they meet the official definition of ôsmall business,ö are far above the level of activity that the great majority of the residents of economically deprived communities could be expected to pursue. Thus, most would be entrepreneurs in economically deprived communities tend to be forced to seek credit from the informal financial markets, to rely on self-financing, or to seek financing from family and friends. As a consequence, most would-be entrepreneurs in economically deprived communities find themselves in a position wherein they realistically have no sources of capital.

Although studies have found that financial assistance to truly small businesses located in economically deprived communities yields highly positive results, the emphasis

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Approximate Word count = 766
Approximate Pages = 3 (250 words per page)

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