Categories: Rev. Dr. Charles Butler,
Last week Harlem Congregations for Community Improvement, Inc. (HCCI) created history as we achieved a milestone by becoming the first community partner in the country to surpass the $1,000,000 mark in community lending through our Lending Circles program. The Lending Circles program was established in 2003 in San Francisco, CA by a local community non-profit organization called Mission Asset Fund (MAF).
The lending circles program was created to assist small business owners mostly from immigrant communities who could not secure loans from banking institutions. The program is built on the ‘Su su’ concept of community lending, however the uniqueness of the lending circles program is the monthly saving activity is reported to the three credit bureaus as an installment loan.
There are 3 savings amounts – $50, $100, and $200. The minimum number in a group is 6 and the maximum number allowed in a group is 12. The number of members in the group will determine the length of the group. You can only participate in one group at a time. But when that group has ended, you can submit a new application and join another group.
Each member must sign a promissory note before participating in the program. So, the monthly savings activity is recorded as an installment loan payment. Participating members have reported their credit score has increased on an average of 25-40 points after one circle! One pastor said to me, “This program is incredible, all I did was save money every month and my credit score increased!”
The monthly contributions are withdrawn from each members’ account on the 17th of the month and will be deposited into the designated recipient’s account on the 25th of the month. Each member will be required to make the monthly contribution including the month they are receiving the monthly disbursement. When everyone in the group has received their disbursement, the circle has been completed.
The lending circle program has been a tremendous financial tool for our prospective fir st-time home buyers. It has both improved their credit score and increased their savings amount and has prepared them to become ‘mortgage ready’ which enabled them to begin the next step in the home buying process of applying for a pre-approval from an authorized lender. We now have nearly 40 homeowners who benefitted from the program.
If you would like to join this savings and credit building program, go to the website www.lendingcircles.org- enter my zip code 10039. Complete the online application and upload the following documents: valid picture ID, void personal check or bank document to verify routing and account number and two-months paystubs or three months bank statements to verify income.
If you are interested in attending the workshop or have questions regarding the home buying process, contact Rev. Dr. Charles Butler at (212) 281 4887 ext. 231or email at cbutler@hcci.org.
