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Economy

How Microfinance Measures Up in New Jersey

A first-of-its-kind U.S. study evaluating the effects of a microloan program among women borrowers in Union City found that the positive effects went beyond boosting earnings.

A beauty salon owner with employees in Union City, New Jersey. The workers were among the participants in a three-year study that examined whether small loans could improve the financial well-being of low-income earners. 

A beauty salon owner with employees in Union City, New Jersey. The workers were among the participants in a three-year study that examined whether small loans could improve the financial well-being of low-income earners. 

Photo: Jason Grobstein/Grameem America

 A three-year study of a microlending program for low-income female entrepreneurs in New Jersey found that participants increased savings, earnings and credit scores, according to a report Friday. 

The final findings from the first randomized control trial of a U.S. microfinance program, which was overseen by Grameen America, come as policymakers consider a range of poverty-reduction initiatives, such as guaranteed income programs and other forms of direct cash assistance. Two years after the start of the Covid-19 pandemic, the U.S. is grappling with an uneven economic recovery that has particularly hurt low-income earners.