The Lakota Fund: The First Micro-loan Fund in the United States

by Rebecca Adamson

Shannon County, South Dakota, is the 56th poorest county in the United States. That may not sound like the beginning of a success story, but in fact, it is – because just 20 years ago, Shannon County was the single poorest county in the country.

Pine Ridge Indian Reservation is located in Shannon County. Poverty rates on Indian reservations are triple the US national average, and the average household income on a reservation is less than ¾ that of the national average. There are an estimated 2.1 million Native Americans in the United States, 20% of whom reside permanently on one of 310 reservations in the country. 85% of them live in Shannon County. According to the US Census Bureau, the annual median income in Pine Ridge is $2,600. The infant mortality rate is three times the national average and the suicide rate is 72% higher than the national average. 70% of the children living on Pine Ridge are impoverished, and there is a 17% unemployment rate.

Like many Indian reservations at the time, most economic activity took place just outside the reservation in border towns controlled by non-Natives. Thus, money that came onto the reservation quickly left, benefiting non-tribal members as it flowed. We needed to find a way to keep money on the reservation and support local entrepreneurship.

The Lakota Fund was established in 1983, making it the first microloan fund in the United States.  Our goal was to bring capital to the reservation in a culturally-appropriate and sustainable way. Our first step involved mapping the informal economy of Pine Ridge – seeing what was already happening on the ground. What we found surprised us: there were informal companies offering catering services, one that made pine box coffins, another that welded metal crosses for the cemetery, and other businesses that provided locksmithing, hairdressing, fence mending, tire repair and Indian crafts. These businesses provided a bare subsistence living for their workers – they needed capital in order to grow. And so the Lakota Fund was born. Using money from large institutions like the Ford Foundation, we established a micro-loans program for small business development. Borrowers also had access to large doses of financial education and various forms of technical assistance through the Lakota Tiwahe Project, the Business Success Coaches of WBI, and the Lakota Fund Trade Center. Microenterprises qualify for loans of $1,000 or less, and small businesses can access loans ranging from $1,000 – $20,000. We’ve also established the Wanbli Otipi housing project, which provides low income housing options. All of this was done in ways that preserved Native values: children were welcome at training sessions, food was commonly shared. Culture and business were one, not separate compartmentalized parts of life.

From its basis in traditional Native values, The Lakota Fund has served as the model of connecting capital markets to low-income communities, and our success has been tangible and undeniable. Since our beginning, we’ve issued over 900 loans totaling $7.2 million dollars. We’ve helped create 500 businesses on or near the reservation, providing 1,415 new jobs, proving that success can be found in the most unlikely of places.

Rebecca Adamson – Founder and President of First Peoples Worldwide
Rebecca Adamson, a Cherokee economist, is Founder and President of First Peoples Worldwide. A leader, activist, and ground-breaking Indigenous woman, Rebecca has a distinct perspective on how Indigenous Peoples’ value and economic systems can transform today’s business models. She utilizes the wisdom and paradigms of Indigenous economics, advocacy, and engagement of corporate social responsibility as tools to catalyze change.


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