MOUNT VERNON — The St. Vincent de Paul Society of Knox County and CES Credit Union will be partnering up to bring a new micro loan program to Knox County this summer.
“Working people who live from paycheck to paycheck can sometimes find themselves in serious financial trouble as a result of an unforeseen expense,” said a statement given to the News by Patrick Kent of the Society of St. Vincent de Paul. Because of this, people may seek out payday loans, which can lead to even greater financial strain, explained Kent.
The goal of the partnership is to allow those in need to avoid those payday loans that can have incredibly high interest rates by offering the $500 micro loans through CES.
“We don’t think a $500 loan is too much work, we are here to help and this program meets our mission,” said CES CEO Sandy Coffing. She added that CES wants to help people, and this partnership mirrors that mission well.
Although the program is through CES and St. Vincent, the funds will be provided with “seed money from the Diocese chapter,” as well as donations, explained a statement from St. Vincent. Because of this, those who meet the program’s requirements and are approved will be guaranteed the loans.
Referrals for the program will typically “come from the Knox County group’s own clients or from referrals by other groups such as Interchurch.”
Once someone is referred to the micro loan program, a two-person team from St. Vincent will interview the person to get basic information. That information is then relayed to their board who is in charge of approving or denying the loan request, Kent told the News.
Once approved by St. Vincent’s board, the person is referred to CES, where they will require a $5 fee that goes towards the person’s application forms and to join the credit union. Then, CES will work with them to set up the loan.
CES will also provide mentors to help the loan recipient while applying for the loan, as well as to help them stay on track with repayment. Recipients will also attend financial education training to “help them get the ins and outs of financial stability and money management,” explained Coffing.
This training will be provided by CES’s chief compliance officer, Karen Bell, who teaches the 90-minute classes, two Thursdays every month at Opportunity Knox.
Because these micro loans are meant as a way to help people get back on their feet and build credit, there are some requirements recipients must meet. They must be able to pay their monthly bills, and they must have a steady income.
And, as St. Vincent’s statement read, “The loans would cover very specific situations: 1. Vehicle repair 2. Home repair 3. Educational expenses and 4. Medical expenses not covered by any insurance.” The statement also added that “The educational expenses would not be for books or tuition but for fees required to take certification tests, for example.”
Why this program is so beneficial, explained the statement, is because “Paying off a small loan results in an improved credit rating and eventually eligibility for a larger loan through the credit union,”
This is important for those who may need more assistance in the future, but don’t currently have a good credit history — or any credit history at all — that would prevent them from getting that assistance.
“We’re really pleased to work with CES,” said Kent, a sentiment Coffing agreed with, adding “I think that both of us feel that way.”
Coffing and Kent told the News they plan to kick-off the program officially by July 1 this year. For more information about the micro loan program, contact the St. Vincent de Paul Society of Knox County at 740-392-4711 ext. 6.