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Despite the reputation U.S. financial markets have for innovative and extensive reach, an estimated 1 in 4 people in American is considered un-banked or under-banked. The U.S. microfinance market aspires to assist low income people and those with poor or no credit. However, the market demand, estimated to be 37.3 million people and growing 2.2% a year, far exceeds the current supply, 250,000 clients as of 2006. Millions need to be served, not thousands. U.S. microfinance institutions (MFIs) must examine how they operate in order to address their shortfalls. There is a tremendous opportunity for institutions to isolate constraints and generate new strategies to achieve scale. Honing target markets, building linkages with regulated financial institutions, and designing applicable products are starting points to advance the industry. Successful institutions establish new visions of success, respond to client demands, leverage their capital, and implement new solutions rapidly. MFIs need to be part of a solution at sufficient size to matter in positively impacting the lives of people in need. Action is needed now to build a healthier financial future for Americans.

Microfinance is a powerful tool in fighting poverty throughout the world. Small foundations are a valuable resource in supporting the efforts and goals of microfinance. However, it is important for small foundations to understand their investment options in the marketplace and compare them in order to find the right one for them. This analysis aims to assist small foundations in making that decision by assessing six investment intermediaries including Peer to Peer, Microfinance Funds, Retail, Development Agencies, Microfinance Networks and Large Foundations. The article also examines the financial vs. social returns produced by the various intermediaries and the level of involvement required to help small foundations visualize their investment goals. Finally, trends in foundation investments are evaluated as such investments are moving from charitable to financial objectives and few, but growing number of, microfinance institutions are moving towards a profit-making model