In the l980s, the community concluded that the only way to retain these funds was to have more businesses on the reservation. The Ford Foundation connected the Pine Ridge-based First Nations Financial Project 7th Generation Fund with Muhammad Yunus and other leaders in the then emerging micro-lending world, thus allowing the Lakota to tap their expertise. The Lakota Funds began as a subsidiary of First Nations.

But it didn't work. And it didn't work again and again.  

One thing that did not work was circle lending, the foundation of most microfinance in the developing world. Circle lending is based on a group strategy to make sure existing loans are paid off within the group before new loans are made to others in the circle.

The Lakota's problems were twofold: Unlike in Bangladesh, there was a lack of people nearby to sell to. Another issue was kinship. "We're all related," Brunsch says, "It was almost impossible to have a circle without eventually having a brother or sister or parent in the circle, and that made it very awkward."

But the Lakota's earliest stumbling block was the lack of a commercial or debt collection code on the reservation, meaning it could not collect debts under tribal law.

That came to a head early on, when many young men with the smaller loans suddenly stopped paying them back. The fund ceased making micro-loans and made a big deal about collecting what it could so that it did not set a precedent of loans as entitlement. And it worked with the tribal government to put in place a debt collection code.

"We were willing to put the time and effort into figuring out why something was not working so we could make it better," recalls Sherry Salway Black of the National Congress of American Indians, who worked at First Nations at the time. "Putting this early framework in place is the reason the fund exists today."

Tanka Bar
Business loans range from $500 to $1,000 micro-loans to artisans and artists like Gerald Cournoyer to a $200,000 line of credit to help a firm such as Murdock Electric, a 20-year family-owned business with 45 employees, to secure bonding. In spring 2011, the fund began its Su Owojupi Project in order to establish a healthy food infrastructure on the reservation. To encourage gardeners to create a business, it supports them with grants up to $2,000 and loans up to $1,000.

The fund also made an equity investment in Native American Natural Foods, whose first product is the wildly successful Tanka Bar made of dried buffalo and cranberry found in places like REI Coop and Whole Foods.

But while money is the carrot for these entrepreneurs, technical assistance is the key. The fund teaches financial literacy, how credit works and business planning.