Month: February 2016

Build a Better LA Banner MAF

 

Mission Asset Fund (MAF) today announces the Build a Better Los Angeles initiative to expand Lending Circles in Los Angeles. Dynamic nonprofit organizations are invited to to apply to join MAF’s national network of 50+ Lending Circles providers through a special application process. This initiative is sponsored by JPMorgan Chase & Co. and the Roy & Patricia Disney Family Foundation.

MAF’s award-winning Lending Circles are a fresh take on social lending, helping participants safely build credit while increasing assets and improving financial health. The average credit score increase for participants is 168 points.

“We are proud to partner with MAF to help more Los Angeles households improve their financial health,” said Colleen Briggs, Executive Director of Financial Capability, JPMorgan Chase. “Lending Circles help families achieve their financial goals through regular savings and affordable credit building. Families are using lending circles to start businesses, save for college, and buy a home. The benefits do not stop with them but extend to their communities and the broader economy.”

According to a recent report from the Consumer Financial Protection Bureau, 45 million adults in the U.S. are invisible to credit markets, making them unable to access affordable credit. Los Angeles has one of the highest unbanked rates in California at 17%, compared to 8% for the state overall. “Without credit scores, people must turn to payday lenders to start a business or get a small-dollar loan,” said Jose A. Quinonez, CEO of MAF. “Lending Circles give people the tools to build credit and enter the financial mainstream.”

“The Roy & Patricia Disney Family Foundation is proud to support Mission Asset Fund’s efforts to build vibrant, economically secure communities in the Los Angeles area through its innovative Lending Circles program. It’s with great pleasure that we support the Build a Better L.A. campaign, which will connect even more low-income Californians with pathways to the financial mainstream,” said Sylia Obagi, Executive Director.

To learn more about the Build a Better Los Angeles initiative or apply to become a Lending Circles provider today, please visit the Request for Proposals here. Selected organizations can gain access to subsidized training costs, training from MAF staff, and on-demand access to an exclusive social loan platform. Applications are due March 18th and new providers will be announced on April 29th. Applicants must be 501c(3) organizations located in the greater Los Angeles area including Los Angeles, Orange, Riverside and San Bernardino counties.

Interested organizations are encouraged to register for an in-person information session on February 26th at 10:30am at the ImpactHub LA to learn more. Register today to reserve your spot.

Join Us for an Info Session
Date: February 26th
Time: 10:30 am
Location: ImpactHub LA

About Mission Asset Fund

MAF Blog LogoMission Asset Fund (MAF) is a San Francisco-based nonprofit dedicated to helping financially excluded communities – namely, low-income and immigrant families – gain access to mainstream financial services. Learn more at missionassetfund.org and lendingcircles.org.

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Respect Meet Build Financial Inclusion

 

Last week as part of CFED’s Assets & Opportunity National Week of Action, Mohan Kanungo—an A&O Network Steering Committee Member and Director of Programs & Engagement here at MAF—wrote about how your credit report can impact important personal relationships. Building on those themes, Mohan is back this week to highlight MAF’s strategy for empowering financially underserved communities to build credit. This blog was originally published on CFED’s “Inclusive Economy” blog.

There are more payday loan shops in the United States than McDonald’s or Starbucks.

That might surprise if you live in a neighborhood where all your banking needs are satisfied by mainstream financial institutions instead of payday lenders, check cashers and remittance services. Sources including the New York Federal Reserve, the CFPB and the Assets & Opportunity Scorecard reveal that there are millions of people who experience financial exclusion, particularly around credit and basic financial products. These disparities are well-documented among communities of color, immigrants, veterans and many other groups who are isolated economically. How can we address these challenges and lift folks out of the financial shadows?

First, as leaders in our field we need to have a frank conversation about how we engage communities around financial services and assets.

It’s easy to cast judgement on those who use alternative products due to the high interest rates and fees, but what do you do if mainstream products are not responsive to your needs? Increasingly, banks and credit unions have been closing brick and mortar locations to move online, while rural and urban areas may not have had access to “basic” financial products many of us take for granted—like a checking account—for generations. Traditional “assets” like homeownership may seem completely out of reach even if you are well-off, educated and savvy with credit, but live in a costly and limited housing market like the San Francisco Bay Area.

Similarly, non-traditional “assets” like deferred action may seem more urgent and important for an undocumented young person because of the physical and financial security that comes with a work permit and permission to stay in the US, albeit temporarily. We need to listen and appreciate the unique challenges and perspectives of financially excluded communities before coming to a conclusion about the solution.

Second, we need to understand that the values and approach driving any solution can tell us a lot about whether the outcome of our work will be successful.Financial Inclusion MAF

MAF started with the belief that our community is financially savvy; many in the immigrant community know what the exchange rate is with a foreign currency. We also wanted to lift up cultural practices like lending circles—where people come together to borrow and loan money to another—and formalize it with a promissory note so that folks know their money was safe and gained access to the benefit of seeing this activity reported to the credit bureaus.

It is about building on what people have and meeting them where they are rather than where we think they should be.

We need to be innovative in our fields to come up with long-lasting solutions within the financial system that are responsible to the communities they serve. Small-dollar loans by non-profit lenders like Mission Asset Fund’s Lending Circles program does just that.

Third, we need to think about how to bring our products and services to more communities who can benefit from such programs, while maintaining the respectful approach to our community.

Early on in our work at MAF, there was a clear sense that the challenges people experienced in the Mission District of San Francisco were not unique and that communities across the Bay Area and the country experienced financial exclusion. We perfected our model and then scaled slowly. While MAF sees itself as the expert in Lending Circles, we see each nonprofit as being the expert in their community. MAF also knew it was impractical for us to build a new office everywhere in the country. So we relied heavily on cloud-based technology to build a robust social loan platform and the existing banking infrastructure to facilitate transactions using ACH, which encouraged participants to get a checking account and put them on a path towards realizing larger financial goals, like paying for citizenship, eliminating high cost debt, and starting a business.

MAF was founded in 2008 with the vision to create a fair financial marketplace for hard-working families.

Since launching our social loan program, we have expanded to provide Lending Circles through 50 non-profit providers in over 18 states plus Washington D.C. We have serviced over $5 million in zero-interest loans and offer a range of financial products, including bilingual online education, to turn financial pain points into credit and savings opportunities. And we have done all this with a default rate of less than 1%.

Currently, we are expanding Lending Circles in Los Angeles, and we have plans to expand further across the country while deepening our reach in places where we already have non-profit providers. Check out LendingCircles.org to see if there’s a provider near you or express your interest in partnership. Financial institutions, foundations, government agencies, private entities and donors can champion the work of MAF and non-profit organizations working to lift people out of the financial shadows.

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