Community Loan Center

Community Loan Center of Michigan

Michigan Community Action is proud to be the Michigan Statewide Coordinator for the Community Loan Center program.

About

The Community Loan Center (CLC) Small Dollar Loan Program is an employer-based small dollar loan program administered through local nonprofits.  Each CLC location recruits employers at no cost to participate in the program and the employer alerts employees about the availability of these optional loans.  Typical uses of these loans are for unexpected car repairs, home repairs, medical bills, or a death in the family.  Employees of participating employers may borrow between $500 and $1,000 at 18% interest with up to 12 months to repay, as an alternative to payday loans.  The size of the loan cannot exceed one pay check for the employee to ensure that the employee can afford to pay it back.  Employees apply for the loan online and when approved, the funds are wired into their bank account.  The loan is repaid through convenient payroll deduction.  Referrals to financial education are made to help borrowers plan ahead and succeed at loan repayment.

The CLC was piloted in Brownsville, Texas and has shown that an employer-based consumer loan can be a successful program and a self-supporting social enterprise for nonprofits.  Over 20,000 loans have been made so far through CLCs currently operating in Texas, Indiana and Maryland.  Click here for further information on borrower outcomes.

For in-person information on the Community Loan Center Program, please attend our sessions at the Building Michigan Communities Conference or at the MCA Summer Conference.

Role of the Statewide Coordinator

As the Statewide Coordinator, MCA works to identify Local Lenders in local Michigan communities.  MCA supports local lenders by providing training and technical assistance in understanding software, best practices and many other aspects of being a Local Lender.

Role of the Local Lender

Local Lenders act as the direct lender in their designated community.  Local lenders recruit and work directly with employers to manage the loan program through their payroll systems.  Local Lenders are responsible for raising their own capital to provide as loans.  For further information on the necessary steps to become a Local Lender, contact Maddy Kamalay.  Please note, no funds to become a Local Lender are available through MCA.

Interested in Investing?

If you are a potential funder that would be interested in seeing this program grow in Michigan, please contact Maddy Kamalay.