Asset Building through Credit

Many microentrepreneurs have “thin file” or slightly impaired credit histories that make it challenging for them to access business loans. When properly managed, secured credit cards are a good tool for building credit. BOI’s Asset Building through Credit (ABC) Pilot Program examined how a secured credit card, teamed with credit education, can help entrepreneurs build their credit and business. With the financial support of the Citi Foundation, BOI teamed up with Justine PETERSEN — a leader in microenterprise development and credit building — to help five microenterprise organizations offer a Citi/Banamex secured card, accompanied by credit education, to microenterprise clients to explore the following questions:

• Do secured cardholders build credit and progress towards their business goals?
• Does offering a secured card help microenterprise organizations build scale?
• Can microenterprise organizations sustain the delivery of the secured card?

BOI worked with the participating organizations to collect data to inform these questions. Our findings are shared in a set of publications, videos, and an infographic that describe how entrepreneurs benefited from the card and document effective practices for organizations interested in offering a secured card as a credit-building tool.

We are grateful to the Citi Foundation for their support of this work.