Lending CirclesSM gain traction in Asian American and Pacific Islander communities
ending CirclesSM gain traction in Asian American and Pacific Islander communities
A growing number of community based organizations capitalize on cultural practices to encourage savings and building credit
November 20, 2014 (Washington, DC) – The National Coalition for Asian Pacific American Community Development (National CAPACD) recently awarded grants to four community based organizations to implement Lending Circles as a way to increase financial capability amongst low and moderate income Asian Americans and Pacific Islanders (AAPIs). Asian Economic Development Association (St. Paul, MN), Asian Services in Action (Cleveland, OH), Center for Pan Asian Community Services (Atlanta, GA), and Hawaiian Community Assets (Honolulu, HI) are the latest additions to a network of community based organizations offering this product to help their clients save while also building their credit. All organizations will begin offering this culturally-familiar model of peer lending in early 2015 in tandem with their in-language financial education and one-on-one financial coaching.
U.S. Census data points to a growing need to serve AAPI poor, one of the fastest growing poverty populations in the wake of the Recession. An analysis of this data, as reported in National CAPACD’s Spotlight: AAPI Poverty, found a 37% increase for Asian Americans in poverty and 60% increase in Native Hawaiians/other Pacific Islanders in poverty between 2007 and 2011. The need for supporting this population is only further highlighted with findings from Banking In Color, a report released earlier this year that found that 55% of AAPIs surveyed did not know who to turn to for financial advice, or turned to potentially unreliable sources such as the internet.
In an effort to address this issue head-on, National CAPACD has partnered with the California-based non-profit Mission Asset Fund (MAF) to offer their Lending Circle product in AAPI communities, as well as JPMorgan Chase & Co. to fund the expansion of the product and financial education and coaching to areas with growing AAPI populations in poverty. Asian Economic Development Association, Asian Services in Action, Center for Pan Asian Community Services and Hawaiian Community Assets were selected from a competitive pool of applicants nation-wide that were seeking to implement this product in their communities. These recent grants grow the network of AAPI organizations already funded by National CAPACD to offer Lending Circles in New York, Los Angeles, Chicago and Houston.
MAF’s Lending Circles financial product formalizes traditional community-based models of lending to help those currently outside the financial mainstream to access safe, affordable and culturally-responsive products. The Lending Circles, also sometimes referred to as rotating credit and savings associations, are a familiar concept for many cultures across the world and are used widely to help support friends, family and other community members to increase their access to capital. MAF’s product builds on this tradition by ensuring that all payments to the Lending Circles are also reported to credit bureaus so that the individual can also build or improve their credit score.
“JPMorgan Chase is proud to support prominent organizations like National CAPACD and Mission Asset Fund as they help consumers increase savings, improve credit and build assets,” said Janis Bowdler, Senior Program Director for Financial Capability and Community Development, JPMorgan Chase. “Dramatic results can come out of the development of financial products and services designed to meet customer needs, creating more financially secure households and stronger communities nationwide.”
Partnerships such as the one between National CAPACD, MAF and JPMorgan Chase are an essential element for helping innovative new asset building models grow to scale across the nation. As an intermediary and advocate for AAPI communities, National CAPACD plays a key role in helping community based organizations build their capacity while also uplifting their best practices into the national spotlight. “National CAPACD is excited to partner with our members AEDA, ASIA, CPACS and HCA in launching Lending Circles as a critical tool to improve the financial vitality of AAPI communities,” said Lisa Hasegawa, Executive Director of National CAPACD. “Each organization was selected because of the creativity they are exercising in ensuring their services and products reach traditionally underserved populations such as microentrepreneurs, recently-arrived refugees and survivors of domestic violence. This is exactly the type of innovation we need for building pathways to financial security and community wealth.”
National Coalition for Asian Pacific American Community Development is the first national advocacy organization dedicated to addressing the housing, community and economic development needs of diverse and growing Asian American and Pacific Islander (AAPI) communities. Its mission is to improve the quality of life for low-income AAPIs by promoting economic vitality, civic and political participation and racial equity.
Asian Economic Development Association (AEDA) is a 501c3, community-based organization focused on small business and community economic development in low-income Asian communities of Minnesota’s Twin Cities region. Their mission is to cultivate vibrant, diverse communities by creating economic opportunities.
Asian Services in Action (ASIA) is a multi-service agency with operations in Cleveland and Akron, Ohio, whose mission is to empower and advocate for AAPIs in Northeast Ohio for access to quality, culturally and linguistically appropriate information and services.
Center for Pan Asian Community Services (CPACS) is the first, largest and oldest multi-service organization in the Southeast to focus on issues and concerns of AAPIs. Their mission is to promote self-sufficiency and equity for immigrants, refugees and the underprivileged through comprehensive health and social services, capacity building and advocacy.
Hawaiian Community Assets (HCA) is a 501(c)3 non-profit, HUD-approved housing counseling agency and community lending institution that builds the capacity of low- and moderate-income communities to achieve and sustain economic self-sufficiency with a particular focus on Native Hawaiians.
Mission Asset Fund (San Francisco, CA) is a nonprofit organization that creates innovative and responsible financial products and models that assist low-income families in overcoming financial exclusion.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.5 trillion and operations worldwide. This Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. Information about JPMorgan Chase & CO. is available at www.jpmorganchase.com.