The state of Minnesota issued $4.5 million this week to 13 micro-lenders in an effort to spur small business lending.

The money, issued under Minnesota's Emerging Entrepreneurs Fund, will be used to provide loans to companies with fewer than 50 employees. Each lending organization will set its own interest rate.

State officials said that most businesses receiving the loans will be owned by women, minorities,or firms located in areas that have suffered high unemployment, high poverty rates or population declines. The business loans may be used for start up costs, equipment purchases,tenant improvements, inventory, acquisitions or franchise fees.

In announcing the loans, Mark Phillips, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement that he expects the loan program to improve the chances that promising companies can "survive and create jobs that contribute to the economic health of their communities."

Loan recipients included:

Southern Minnesota Initiative Foundation in Owatonna - $926,000

Midwest Minnesota Community Development Corp. in Detroit Lakes - $628,000

Northeast Entrepreneur Fund in Virginia, Minn. - $515,000

Initiative Foundation in Little Falls - $407,000

Latino Economic Development Center in Minneapolis - $325,000

Metropolitan Economic Development Association (MEDA) in Minneapolis - $309,000

Metropolitan Consortium of Community Developers in Minneapolis - $295,000

African Development Center of Minnesota in Minneapolis - $272,000

Neighborhood Development Center in St. Paul - $266,000

Milestone Growth Fund Inc. in Minneapolis - $233,000.

Sparc in St. Paul - $135,000

Women Venture in St. Paul - $112,000.

Headwaters Regional Development Commission in Bemidji - $77,000