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When a microfinance organization started in Bangladesh is the only way some American entrepreneurs can get loans, what does it say about the state of banking in the United States?
The Grameen Foundation describes itself as “a leader in the fight against poverty in sub-Saharan Africa, Asia, the Middle East/North Africa and Latin America.” An offshoot of the foundation, Grameen America, a month ago opened a branch in Charlotte, N.C., the second largest banking center in the country, and has 10 other branches in the United States.
To be sure, those applying for microloans don’t have the background to apply for traditional ones. But even small business owners with good credit are having a hard time getting loans. Community banks aren’t the problem – it’s the majors, the same ones bailed out by American taxpayers a few years ago, who are to blame. This is a serious problem because small businesses employ more than 50 percent of those working in the United States. If they can’t get access to credit, it means fewer people will be hired and the tepid recovery will continue apace.
Television commercials from the country’s biggest banks make it look as if they focus on loaning to artists, bakers and independent retailers. As Bank of America said in a recent advertisement, “[W]e know the impact that local businesses have on communities. That’s why we extended $6.4 billion dollars in new credit to small businesses across the country last year. Because the more we help them, the more we make opportunity possible.”
And in September 2011, the country’s 13 biggest banks stood by Vice President Joseph Biden and the head of the Small Business Administration in Cleveland and pledged to loan $20 billion more out to small businesses over three years. This fall the group announced it had increased lending by $11 billion in the past year.