Bringing the Credit-Invisible into the Light
The Mission Asset Fund (MAF) is a San Francisco nonprofit that works to expand access to financial services, savings, and investment opportunities for low-income and working-poor families. The organization was established in 2007 to combat financial exclusion in the Latino community and among other underrepresented groups, and was a co-winner of the NCLR Family Strengthening Award at this year’s NCLR Annual Conference in Kansas City.
MAF has formalized the process of Lending Circles, in which a small number of people agree to lend money to each other at no interest, by having registered participants’ payments reported to the national credit bureaus. This helps people who may not otherwise have had access to get into the mainstream financial system, says Ximena Arias, Financial Services Manager at MAF.
“The CFPB [Consumer Financial Protection Bureau] released a report that said that 45 million adults in the U.S. are credit-invisible in the financial system. It’s a catch-22 scenario where if you don’t have credit you can’t get access to credit,” she says.
“A credit report is like a passport to the financial marketplace,” said José Quiñonez, CEO of Mission Asset Fund, in a 2014 New York Times article. “Without that passport, you’re denied entry.”
The process can help those who have specific goals in mind, such as paying the application fee to become a citizen. That was the case for Karla Henriquez, who has experienced the process both as a participant and as the Programs Coordinator for MAF.
“I got my mom, my sister, and I to join the Lending Circles for Citizenship program where we were able to make payments of $68 for 10 months,” she says.
Other Lending Circles programs facilitated by the Mission Asset Fund can be used to save for a deposit to rent an apartment or secure fees for a temporary work permit.
Arias says the organization also offers financial counseling and education to participants, and partners with more than 40 organizations in 14 states. Those interested in finding related services in their area can visit: lendingcircles.org.