Last week’s announcement that Wells Fargo and the U.S. Small Business Administration would expand a microfinance program to Ottumwa was good news for the community. It’s tough to say just how much of an effect it will have, but it’s an encouraging step.

Microfinancing focuses on small loans for people who want to establish businesses. They might not qualify for loans at traditional lending institutions, or the amounts involved may be too low to be attractive to those lenders. Either way, the loans offer the potential to help Ottumwans make the leap from dreaming about a business to actually starting one.

One of the best quick explanations of what microfinancing is comes, of all places, from the “Loan-a Lisa” episode of “The Simpsons.” Muhammad Yunus, who won the Nobel Peace Prize in part for his pioneering work on microfinance, made a guest appearance to explain the process.

This is economic development, though it’s not along the lines people usually clamor for. Microfinance loans won’t help bring a multi-million dollar company with hundreds of new jobs to Ottumwa in the next year or two. But there’s still something to be said for putting a few dozen people to work.

In Iowa, Solidarity Microfinance said it has given more than 1.7 million in loans and had a repayment rate of more than 99.7 percent. Those numbers are dated, so we use them with a bit of caution, but they generally fall in line with studies that have shown microfinancing sees repayment of the loans far more often than not.

Starting a business is tough. On the financial side you have to convince lenders to take a leap of faith, especially if you have never started a business before. Since most new businesses begin with a relative handful of people, it means long hours and a lot of hard work.

The opportunity for people willing to put in that work to get access to financial support is a real gain. Ottumwa has seen some successful startups in recent years. This could help add a few more to the community.

There are sure to be some who complain that local economic development is once again missing the mark and is failing to bring in their fantasy White Knight Corporation with 1,500 new jobs. But let’s remember that last week’s announcement and the microfinancing itself is in parallel with local economic development, not a replacement. It’s a new track on which other projects can run.

Let’s also remember that most of the major companies we see today started very small. It would be foolish to predict any specific company aided by this new program would become a major employer within a couple decades.

But it’s not entirely unrealistic to believe that one could find a niche in which to thrive, becoming a regional player over that time. And it’s well within the realm of possibility that several could become steady employers for at least a handful of people, supporting families and becoming valuable members of the business community.

If that’s the payoff here, it’s still a gain for Ottumwa. And we’ll happily take it.

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