A society where its backbone is appreciated for their strengths and values – not unfairly targeted, threatened with deportation, or forced to live in fear and silence. It’s the difference between being stuck selling tamales door-to-door with a $5 profit at the end of the week to owning a bustling restaurant with 12 employees that is a vibrant meeting place for an entire neighborhood.
A disproportionate number of minorities, immigrants, and low-income households have no checking or savings accounts or credit report on file. Living in the shadows means struggling just to be able to do the basics – rent an apartment, get a job, get a credit card or start a business.
With a little creativity and a unique approach, we can create a fair marketplace for everyone. Since 2007, we’ve helped thousands of low-income people transform barriers into opportunities, enabling them to build brighter futures.
MAF is located in San Francisco’s vibrant Mission District, a neighborhood known for its street festivals, colorful murals, and super burritos. It’s home to cooks, house cleaners, and small business owners who dream of someday sending their kids to college or owning a home. But without bank accounts or credit histories, everyday activities like paying bills or renting an apartment can be a daunting challenge.
MAF was founded in 2007 when the Levi StraussFoundation and a dynamic group of community leaders came together and imagined a different future for Mission residents. They founded our organization using a million-dollar investment funded by the sale of the last Levi Strauss denim factory in San Francisco. With a little creativity, they hoped that everyone in the community could have a chance to reach their dreams, one step at a time.
Early on, we surveyed low-income residents to better understand their lives and learned that 44% of all households in the Mission Districts had no credit scores. As a result, many families turned to fringe financial services like payday lenders, which have more locations than McDonalds and Starbucks combined.
As an alternative to these fringe services, many residents turned to the time-honored tradition of coming together to lend and borrow money with each other. Known as “tandas” within the Mexican immigrant community, this informal borrowing practice helped people meet immediate needs. But it didn’t them build a credit history, a critical first step toward financial security and prosperity.
Building on this idea, MAF launched Lending Circles in 2008. This first-of-a-kind social loan program has helped people open bank accounts, avoid predatory lenders, and quickly build credit. Word spread throughout the neighborhood, and social lending continued to grow.
To take our ideas to market, we had to build systems that would let us service zero-interest loans and report clients’ payments to credit bureaus, something most nonprofits would never have to think about. But we approached this challenge like all others. First, we imagined what could be. Then we built it with help from the brightest and most passionate. Every day, we continue to innovate and improve – from expanding our reach to streamlining enrollment. We prioritize making our systems work better so our nonprofit partners can focus on what they do best: supporting their communities.
In 2011, we expanded our programs to the entire Bay Area and participated in an academic evaluation with San Francisco State University. The results proved that Lending Circles had a significant impact on low-income borrowers. As word spread, nonprofits across the country began asking to bring our programs to their communities. And as soon as the systems were built, we began working with nonprofits across the U.S., quickly joining forces with 20 organizations in the first two years.
Our vision is to create a fair financial marketplace for hardworking people. Because when one person is invisible, stuck or strapped, it hurts an entire family. And when one family suffers, the whole community suffers. That’s why we work to make Lending Circles and other loan products available nationwide. Our work is built on hidden strengths: of people, of nonprofits, of communities. And we’re continuing to expand our network of nonprofit providers across the country to help build a brighter future for the millions of people who live in the financial shadows.