Grameen America’s Microlending Program Reduces Material Hardship and Increases Credit Worthiness, Business Ownership and Earnings, and Nonretirement Savings

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John Hutchins, MDRC, [email protected], 212-340-8604

(New York, NY, September 29, 2020) — Nonprofit research organization MDRC and Grameen America today released new interim results from MDRC’s evaluation of the Grameen America microfinance model, a program that provides small loans to minority women in poverty seeking to launch or expand small businesses. Grameen America has invested over $1.5 billion in more than 132,400 low-income women entrepreneurs since January 2008.

The rigorous, independent, third-party evaluation determined that the Grameen America microlending model resulted in a reduction of measures of material hardship and an increase of credit scores and business ownership. The program boosted business earnings but has had no effect so far on overall net income. The microlending program also improved participants’ feelings of overall financial well-being.

The 18-month study, which was funded by Robin Hood, New York City’s largest antipoverty organization, examined 1,492 women in 300 loan groups who applied to the Grameen America microlending program in Union City, NJ. It marks the first time a microfinance institution in the United States has been evaluated using a randomized controlled trial, which is often referred to as the gold standard of evaluations, as it uses the same rigorous methods as pharmaceutical clinical trials.

Highlights from the evaluation of the Grameen America program, include:

  • Reduction of material hardships: About 44 percent of women in the Grameen America group reported experiencing any type of material hardship in the past year, a 15 percentage point reduction from the control group level.
  • Increased credit scores: The Grameen America program produced a 20 percentage point increase in the attainment of a VantageScore (a credit score), a critical step that allows participants to gain further access to credit. The study also noted a 10 percentage point increase in the attainment of a Prime credit score, the top tier of creditworthiness.
  • Increased business ownership: About 94 percent of women in the Grameen America group reported operating their own businesses 18 months after joining the program, an increase of 19 percentage points over the control group. 
  • Increased business earnings but no effect on overall net income: The program increased both monthly business revenue (by $523) and monthly busi­ness expenses (by $384). Because the program increased business revenue by a greater amount than it increased business expenses, the program increased average monthly earnings from a business. Increased business earnings offset decreased wage earnings, resulting in no effect on net income.
  • Increased nonretirement savings: Women in the Grameen America group reported having $1,920 in average savings compared with $1,180 for women in the control group, a 63 percent increase.
  • Improved feelings of overall well-being, financial empowerment, and social support: The Grameen America program contributed to deepening relationships among members of the loan groups — fostering trust and broadening social support systems.

“Building new paths to economic mobility is not easy, and these encouraging results demonstrate the importance of Grameen America’s work in a community that struggles economically in even the best of times,” said Virginia Knox, President of MDRC. “We thank the talented staff at Grameen America — and especially the program participants in Union City — for allowing us the opportunity to document their experiences in this rigorous evaluation.”

“For Grameen America, the 18-month results stand as a positive demonstration of the collective impact of our increasingly vital work. The findings substantiate a statistically significant reduction in key metrics of material hardship, improved credit scores, and increase in business ownership and nonretirement savings for the economically marginalized businesswomen in our microfinance program,” said Andrea Jung, President and CEO of Grameen America. “We are very pleased to see a statistically significant increase of $523 in monthly gross revenue compared to the control group. This noteworthy finding suggests that business owners are investing more of their earnings back into their business in the early years.”

 “With this unique independent validation of our model, we have even greater incentive to continue to advance and expand the program,” said Jung. “We look forward to deepening our understanding about the many aspects of Grameen America’s impact in the study’s final 36-month report.”

“Robin Hood funded the Grameen and MDRC study to understand whether microfinance could act as a viable tool to lift immigrant women out of poverty in the United States. While the results are mixed in terms of its impact on overall net income, we found the reductions in material hardship and increases in credit scores very promising,” said Amanda Stern, Senior Program Officer at Robin Hood. “We are proud to be able to add a rigorous randomized-controlled trial — the gold standard of evaluation — to the national body of research on microfinance.”

The interim results of the Grameen America program evaluation are the second set of findings in the long-term study conducted by MDRC. The final evaluation results covering three years of follow-up are scheduled to be released next year and will present impacts on many of the same outcomes, as well as asset-related outcomes. 

For more information, read Putting Microfinance to the Test: 18-Month Impacts of the Grameen America Program, by M. Victoria Quiroz-Becerra, Kelsey Schaberg, Daron Holman, and Richard Hendra.

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About MDRC: MDRC is a nonprofit, nonpartisan education and social policy research organization dedicated to learning what works to improve programs and policies that affect the poor. MDRC is best known for mounting large-scale demonstrations and evaluations of real-world policies and programs targeted to low-income people. We helped pioneer the use of random assignment — the same highly reliable methodology used to test new medicines — in our evaluations. From welfare policy to high school reform, MDRC’s work has helped to shape legislation, program design, and operational practices across the country. Working in fields where emotion and ideology often dominate public debates, MDRC is a source of objective, unbiased evidence about cost-effective solutions that can be replicated and expanded to scale.

About Grameen America: Founded by Nobel Peace Prize recipient Muhammad Yunus, Grameen America is a 501(c)(3) nonprofit microfinance organization dedicated to helping entrepreneurial women who live in poverty build small businesses to enable financial mobility. The organization offers microloans, training, and support to transform communities and fight poverty in the United States. Since opening in January 2008, Grameen America has invested over $1.5 billion in more than 132,400 low-income women entrepreneurs. Started in Jackson Heights, Queens, Grameen America has expanded to 21 locations in New York City, Austin, TX, Boston, MA, Charlotte, NC, Indianapolis, IN, Los Angeles, CA, Newark, NJ, Omaha, NE, Oakland, CA, San Jose, CA, San Juan, PR, Union City, NJ, Houston, TX, Fresno, CA, and Miami, FL. Learn more at

About Robin Hood: Founded in 1988, Robin Hood finds, fuels, and creates the most impactful and scalable solutions lifting families out of poverty in New York City, with models that can work across the country. Robin Hood invests roughly $100 million annually to provide legal services, housing, meals, workforce development training, education programs, and more to families in poverty in New York City. Robin Hood tracks every program with rigorous metrics. Learn more at; and follow Robin Hood FacebookTwitterInstagramLinkedIn.