Lending Circles helping people improve credit
A nonprofit credit counseling center has found success in Nevada with a lending concept used in Mexico, China and other parts of the world where access to banking services is limited.
Financial Guidance Center’s Lending Circles creates groups of people who contribute a set amount each month to a fund and each month one member gets the full amount to spend as he or she pleases.
“Basically, this program is designed to help low- to moderate-income people borrow money and build their credit,” said Stan Watkins, asset development specialist with Las Vegas-based Financial Guidance Center.
Watkins, who was recruited from Wells Fargo Bank, launched Lending Circles in June. As part of the program, the center runs a credit report on each participant before the group begins and another after six or 12 months when the Lending Circle ends. Watkins said on average individual credit scores improve by 30 points.
“Currently, we have 12 groups with at least six people in each going through the program in Las Vegas and Reno,” Watkins said. “The minimum is $25 a month, but we’ve had some groups where each member contributes $200 a month.”
Michele Johnson, president and CEO , said the program has had a positive effect on consumers who need to work on their credit or re-establish their credit.
So far, the Lending Circles have had 11 circles with 64 members, who saved and loaned themselves a total of $36,225.
The program is just one of many counseling services the Financial Guidance Center has been offering to low- and moderate-income individuals. The center offers bankruptcy and credit counseling services, as well as income tax preparation, down payment assistance programs and housing counseling services.
Financial Guidance Center has been working with Nevada State Bank for almost 20 years to offer Fresh Start Checking. The program is designed to help customers who have had trouble in the past with bounced checks or overdrafts and are unable to establish a checking account elsewhere.
Contact reporter Chris Sieroty at csieroty@reviewjournal.
com or 702-477-3893. Follow @sierotyfeatures on Twitter.
