A Hand Up: Branford Microfund Offers Interest-Free Micro Loans to Community Members in Need
Months before the pandemic arrived and created unexpected financial emergencies for many, the founders of a new, all-volunteer non-profit, Branford Microfund, developed a program to provide interest-free microloans of up to $2,000 to help community members of modest means facing a one-time financial obstacle.
As noted at Branford Microfund's website nearly 6 in 10 Americans don't have enough savings to cover an unexpected $1,000 expense. Forty percent of Americans say they would struggle to cover $400 in emergency costs. As founding board member and chair Virginia Page explained, Branford Microfund is there for a "...hand up; not a hand out."
"We're helping people through a rough spot," said Page.
Officially certified as a 501 c3 non-profit in December, 2019, Branford Microfund is now widening its reach to help Branford residents in need; and reaching out to the community for support in its mission.
Making Microloans
Microloans of up to $2,000 are available to help and can come to the rescue of those who may not be able to rely on a conventional loan to cover an unexpected cost. Page said the microloan could be just the money needed to help someone through a rough patch which could otherwise throw a life off track; such as not being able to pay for a medical bill, losing work or school attendance because emergency auto repairs can't be covered, coming up with the cost of replacing or repairing appliances such as a broken water heater or furnace in the heart of winter, or even help pay costly licensing fees standing in the way of someone who's completed schooling and hopes to start a new career.
Applicants must be a Branford resident who can demonstrate an immediate need and will be vetted for the ability to pay back the loan. If needed, they'll also receive mentoring on financial responsibility. Each short-term loan will involve a 24 month no-interest repayment plan.
Because the application, screening, interview and loan award process is nimble, it provides the quick response that could be a game-changer for someone in urgent need of support, including residents now encountering financial need due to the impacts of COVID-19, said Page.
"Even before COVID, our aim was to help people stay on track during these financial emergencies and situations, and keep them moving forward in their lives, and feeling positive about their lives," said Page.
Funding the Fund
Page is the founding member of the fund's seven-person Board of Directors, which began working over a year ago to prepare and launch the new non-profit. Board members are Page, Norbert Church, secretary; Bob Imperato, treasurer; and directors Tom Laurenson, Sue Wharfe, Karen Wies and Maryann Amore. A nine-member Advisory Board also supports Branford Microfund.
"It's kind of a new and unique concept," says Page of non-profit microfunds. "As I understand it, there are only two others in the United States; possibly three [and] they've been very successful, including one that's been going for about 15 years."
Page said that fund is the Ossining Microfund (Ossining, NY), which was the first of its kind in the country.
To date, Branford Microfund has been seeded with individual donations from supportive business and community members and leaders, as well as a $10,000 Branford Community Foundation emergent grant and a contribution of $1,500 from Branford Rotary. A mail appeal is underway to reach out to more in the community who may want to contribute. As Page describes it, it's a "pay it forward, pay it back" concept.
"The money that donors put into this will go out and it will come back. It revolves; so their donations keep helping, time after time," said Page.
All of the funding allows Branford Microfund to provide interest-free loans to Branford residents who will be able to use the money to maintain their lives and continue to be productive members of the community, she said. Paying back the loans will then provide money to support other community members in need.
"It helps the community by keeping a community member active, working and contributing to the town. It's kind of a win-win situation for a lot of individuals here," said Page.
Partnering to Help
Branford Microfund also works with community partners including Branford Counseling and Community Services and Women & Family Life Center to help identify those in need. The group can also partner with employers, social service agencies, and faith based institutions. Page noted applicants can also self-refer by downloading an application and related documents at www.branfordmicrofund.org and emailing the completed paperwork to info@branfordmicrofund.org
The fund will also act as a gatekeeper, potentially connecting those they assist with loans to community partner agencies for other types of assistance those groups may provide.
"So it's kind of working relationship with other organizations in town, too," said Page.
One Branford Microfund loan has been given out already and another application is in for review, said Page. The hope is that many more will be assisted, for many years.
"I see this as having a lot of potential for helping individuals in Branford, and I'm excited about seeing it take off and really start working," said Page.
Tax-deductible contributions may be made online at www.branfordmicrofund.org or by a check made out to the Branford Microfund and mailed to P.O. Box 884 Branford, CT 06405