St. Vincent de Paul to offer microloans
According to the Capital Times, Madison’s Society of St. Vincent de Paul will offer loans of $500 to around $2,500 through the Bank of Sun Prairie, beginning as early as June 10. The Society will deposit $60,000 to backstop the borrowers, enough to fund roughly 30 microloans.
Made up of members from 18 local churches, the Society currently offers forms of assistance including a food pantry, a charitable pharmacy, short-term rent assistance, and more. This new program will provide an alternative to payday lenders, lending circles, or peer-to-peer lending sites.
The new microlending program follows successful ones at St. Vincent de Paul societies in north Texas and Columbus, Ohio, which loan around $500,000 and $250,000 a year, respectively. Those who call to request assistance through the program will go through a screening process to determine eligibility and the likelihood that they will be able to repay the loan within about two years.
Because lending regulations are consistent statewide, the program model could expand beyond Madison. Banks could even begin to offer these loans on their own, without a nonprofit backstopping them.