Loans made to local individuals struggling with short-term financial crises.
SEG’s Emergency Loans Project was the initial effort of the Local Loans Project, established in 2010 in response to the persistent problem of rural poverty in Grinnell and the central Iowa area. This project aims to provide temporary financial assistance to those without adequate access to traditional borrowing options. The project is intended to serve as an alternative to predatory lenders that profit from high interest rates that are nearly impossible for low-income families to pay.
To this end, we give small zero-interest loans to community members to help bring them closer to financial sustainability. Without such loans, these people, most of whom are unbankable in the commercial world, might slip into joblessness, homelessness or worse. In the past two years, the Emergency Loans Project has helped 25 individuals, loaning a total of over $13,000.
An excellent example of one of our loans involved a young woman whose car broke down and who could no longer get to her job, nor could she drive her two sons, both with disabilities, to their doctor’s appointments. Our loan enabled her to get her car repaired, get back on her feet and continue to be self-sustaining. Other uses of loans include escaping a usurious PayDay loan debt-trap, paying for a physical for a job, obtaining medically necessary equipment, and achieving an online degree in accounting.
How We Operate
The Emergency Loans Project partners with the First Presbyterian Church of Grinnell and Mid-Iowa Community Action (MICA), a non-profit organization serving families affected by poverty in central Iowa. These organizations allow us to reach the wider community and provide us with loan referrals from across the Grinnell area. Due to the sustainable nature of microfinance, we are able to continuously reach more and more members of the Grinnell community with each loan repaid and re-lent.
In order to maintain communication with our local loan recipients, we work with volunteer “Community Liaisons”—a diverse group of Grinnell community members including professors, retired workers, longtime residents, coaches and religious leaders. Each loan recipient is paired with a Community Liaison who establishes a personal relationship with the borrower. Many of our loan recipients have had poor relationships with previous creditors. In contrast, this unique relationship provides loan recipients with a genuine advocate throughout the borrowing process.
The program structure includes monthly meetings between a Liaison and recipient where they chat and discuss any issues that may come up. These channels of communication enable us to collaboratively work with our recipients, understanding that people sometimes get knocked down through no fault of their own. Through the Liaison, we promote mutually empowering relationships among members of our community.
To apply for an emergency loan, you must first set up a meeting with a loan representative. At this meeting, the representative can answer questions, refer you to resources, and discuss your eligibility for a loan. Emergency loans are typically no larger than 800 dollars, and are only given to Grinnell Community members.