St. Vincent de Paul Microloan Program offers a new way out of poverty

Monica Yeamans, Editorial assistant.

This past summer Society of St. Vincent de Paul, Northern Kentucky began a new venture to help those in need help themselves out of poverty — the new “Microloan Program – a new path out of poverty.” This new program has been successful through local SVdP chapters in other U.S. cities such as Columbus, Ohio; Lancaster, Penn.; Dallas, Texas; and Arlington, Virginia.

In partnership with Kemba Credit Union, Florence and the Butler Foundation of Northern Kentucky, SVdP Northern Kentucky can offer clients an alternative to high interest loans while also providing clients an opportunity to learn about personal finances through financial mentoring.

SVdP NKY’s low-interest loan is fully guaranteed by SVdP NKY through its microloan program. Clients are referred by a Vincentian volunteer. Loans can be used to retire an existing loan, or for help with car, medical, educational or home repair expenses.

SVdP Northern Kentucky said that its hope for the program is to empower a person who has struggled financially and affect systemic change in the NKY community.

Deacon Mike Lyman, chair of SVdP Northern Kentucky’s Microloan Committee (a committee of seven community members) said, “These loans have provided the opportunity to address immediate needs such as car repairs and retiring predatory loans. The program does more than that, though. For our neighbors, they offer the opportunity to grow in confidence and financial skills. For our Vincentians, they are blessed with the opportunity to enter into extended relationships with our neighbors, which allows them to influence lives in a substantial way. The money made available is helpful, but the hope generated and the mentoring support provided are the true riches of this program.”

Karen Zengel, executive director, SVdP Northern Kentucky, is an ex-officio member of the Microloan Program Committee and reports that to date SVdP Northern Kentucky has made four microloans available to clients.

“Clients have the chance to get a loan to cover other expenses that might otherwise threaten their ongoing financial stability,” Mrs. Zengel said.

The committee convenes every time someone applies for a loan. Deacon Lyman has set up a variety of trainings for the financial mentors, which is another important component of this program.

Mrs. Zengel said, “While the loan itself is a really good opportunity for someone who may not otherwise have a chance to take out a loan, the other really important component of this program is the mentoring piece. That is important on two different levels: it is important to the individual who is a borrower that we work with them to help them achieve their own personal financial goals. They may not have had any instruction or guidance on how to start a savings account or even how to open a bank account. We’re helping the borrowers build a financial skill set. The other thing is, on the part of the Vincentians, it gives them an opportunity to work with a person who really needs a commitment, to make a significant change in their lives. So it is a different kind of experience than when they have the opportunity to do home visits. It is very motivating working with a person when you know they are taking steps to improve their lives. It can be very fulfilling for our Vincentians to have those chances to work with families who make a commitment.”

<<For information visit the St. Vincent de Paul of Northern Kentucky website>>