Date of Completion

Spring 5-1-2021

Thesis Advisor(s)

Jeffrey P. Cohen

Honors Major



Entrepreneurial and Small Business Operations | Inequality and Stratification | Nonprofit Administration and Management | Other Business | Work, Economy and Organizations


Widespread poverty remains a reality for many in both developed and developing countries. Policymakers, charitable organizations, and entrepreneurs have introduced diverse strategies to provide individuals and communities opportunities to rise from poverty. One such method is microfinance, a system developed by Muhammad Yunus in the early 1970s to provide small loans and financial services to borrowers too impoverished or otherwise lacking in credibility or collateral to be considered by traditional means of credit.

Since its inception, microfinance has spread among other countries to mixed success. While many researchers claim microfinance has proven to be an effective tool to combat poverty, build wealth, and provide empowerment to borrowers in developing countries, programs in developed countries have not seen the same level of success.

This thesis investigates the current, specific microfinance environment of St. Louis, Missouri, USA to determine if microfinance offers poor St. Louisans a successful, sustainable method to build lasting individual and community wealth. This thesis also aims to determine if microfinance institutions serving St. Louis face the same challenges and limitations that face microfinance institutions nationwide.

The results of this analysis suggests that microfinance is a limited but successful method for a small number of poor St. Louisans. Although providing tangible economic improvements for clients, the few microfinance programs do not maintain operational self-sufficiency, impact a limited population, and rely on external subsidies to provide services. This analysis also finds that microfinance institutions face limitations in growth and outreach similar to the microfinance environment in the US as a whole.