Why I Can't Get a Loan... and Probably Shouldn't Anyway

Cheshire, C.L.; Hezel, Francis X. (2000-08-25). [www.micsem.org Why I Can't Get a Loan... and Probably Shouldn't Anyway]. Micronesian Counselor (Report). Kolonia, Pohnpei: Micronesian Seminar. pp. 1–8.

• Has attachment: File:5T269TWF.pdf

Abstract: ...It is no help to the Micronesian entrepreneur to make bank financing for business start-ups readily accessible if the end result is a business overwhelmed by debt. The entrepreneur and the goal of developing successful businesses are better served if the entrepreneur is forced to recognize and accept the burden of raising his or her own start-up capital, and if those advising have a variety of strategies to help accomplish this goal. Both boot-strapping and the Grameen Bank model have attractive features that can be built into the small business development program in the FSM. Both recognize and accept that conventional banks are not the solution to the problem of asset-poor small businesses. Boot-strapping puts the burden of financing squarely on the shoulders of the entrepreneur. In doing so, it limits what the entrepreneur can do, but it also keeps the entrepreneur from taking on a debt that the business cannot support. The Grameen Bank makes loans available without requiring collateral, but the loan is made in a very controlled environment where there is constant peer review and peer pressure to pay back the loan. A combination of peer support and peer pressure should work well with Micronesians who are very familiar with collective effort, group support and group pressure...