In this Issue
Peer Lending in the U.S.
Frank Discussions
Innovation: Mission Asset Fund
Red Flags Rule Deadline
Tools: Credit Builder Action Plan
Resources
Upcoming Events
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Congratulations to CBA and CBA members awarded SBA PRIME! SBA is partnering with CBA to assist microenterprise development organizations to provide better credit education to entrepreneurs and build entrepreneur credit. CBA received a PRIME award to expand our knowledge sharing activities around credit, credit building, credit reporting and credit behavior outcome tracking. Stay tuned for more information and events including webinars, regional trainings and consulting for microenterprise development practitioners. Did you know SBA technical assistance funds can be used to cover CBA Reporter and Access fees? Contact CBA to learn more about strategies for improving entrepreneur success with credit. |
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Dear colleague, In this issue we share some recent innovations in peer lending. Peer lending has long been recognized as a powerful poverty alleviation tool. Several CBA members are showing new ways the model might in fact succeed at scale in the United States and create measurable results. Mission Asset Fund and Grameen America are leveraging peer lending in two different ways to help low-income immigrants open bank accounts, deposit savings, and also build a credit history with the loans. Moreover, CBA is working with Mission Asset Fund to build out their database to track financial behavior and credit score changes. Be on the lookout for more information from CBA about outcome tracking! As always, please let us know if you are doing something innovative – or if you want to learn more about how we can support you!
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Best Credit Builder Product for your Community Peer Lending Observations (FIELD resource) Business Capital for Microentrepreneurs (AEO publication) |
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Is the changing face of America making peer lending more relevant in the U.S.? Nearly 80 million people in the United States are underbanked and lack access to safe, affordable mainstream credit. And with a 57% increase in immigrants in the U.S. since 1990, a growing segment of the U.S. population is familiar with informal credit such as peer lending and lending circles. Two CBA members are making a splash in newspapers and news channels with their peer lending models.
Grameen America brought the peer lending model perfected in Bangladesh to Queens, New York where they are creating lending circles and making microloans. Since 2008 they have made over 1000 microloans – mainly to first-generation immigrants. They recently dropped their maximum first-time loan size from $3000 to $1500 in their pursuit to reach the poorest of the poor. The lending circles meet every week and the participants are required to make a loan payment and also deposit a minimum amount into a savings account. Grameen America is also partnering with Experian and Credit Builders Alliance to report repayments and build credit. Visit Grameen America’s website to learn more.
Meanwhile, in San Francisco, Mission Asset Fund (MAF) is helping to formalize existing peer lending circles in their largely immigrant communities. While the participants fund the lending circles – or Cestas – in traditional ways, MAF is “formalizing” the lending by partnering with OneCalifornia Bank and CBA to report the loans to major credit bureaus. MAF has also tapped CBA to help them fully integrate credit building into their Cesta program through our “Credit is an Asset” training program and outcome tracking handbook. Click here to learn more about CBA training. To learn more about Mission Asset Fund’s peer lending, check out the CBA Innovation story and link below.
We know other CBA members are also opening doors for low-income individuals through peer lending such as Washington CASH in Seattle and Project Enterprise in New York. Is the current economic and financial crisis igniting new pathways for delivering loans? Let us know in this poll |
| Featured Innovation: Mission Asset Fund's Cestas Populares |
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The Mission Asset Fund is tackling this significant gap with Cestas Populares (roughly translates to “people’s basket” from Spanish), a program supporting peer lending circles to pave opportunities for low-income immigrants to build credit scores and increase access to credit. Learn more about Cestas Populares |
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The “Red Flags Rule” requires certain organizations, which may include nonprofit organizations, to implement a written identity theft prevention program by November 1, 2009. To find out if your organization is required to comply with the rule and the steps needed to comply, click here.
We also have shared information to assist CBA members comply with the Red Flags Rule policy. CBA members will receive an invitation for a conference call hosted by Pro Bono Partnerships in October. They have assembled lawyers to discuss the Red Flags Rule policy as they apply to nonprofits and answer your questions. If you have a sample written identity theft Red Flag program you are willing to share with your colleagues, please email katie@creditbuildersalliance.org. |
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Credit Builder Action Plan
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The Credit Builder 5-Step is challenging the way asset builders around the country understand credit in today's economy. When it comes to putting credit building into action, it's time to put on your thinking caps to determine how your clients can act on each step. |
| CBA at Upcoming Events |
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Workshops at CBA members' offices
Session: Microenterprise and Asset Builders as Credit Builders
Panelist: CDFI Loan Funds and Consumer Lending
Workshop: Credit Builder Training
Webinar: Credit is an Asset (for CAMEO members) Want to know how to get training for your organization? Click here |
Forty four percent of residents in San Francisco’s Mission District neighborhood have no credit score. That’s over 25,000 people, predominantly Hispanic, without a financial resume to leverage resources to build assets, such as buying a car, getting a good mortgage for a home and loan to start or grow a business.
Highlighted Tools:
Credit Builders Alliance
Tel: 202-730-9390
Email: info@creditbuildersalliance.org
www.creditbuildersalliance.org