NEW YORK (3/11/14)--The "Borrow & Save" program, a small-dollar loan product for low- and moderate-income consumers, has reached capacity with 14 credit unions nationwide.
"Borrow & Save," a product of the National Federation of Community Development Credit Unions, is one of five products in the Filene Research Institute's accessible financial services incubator funded by the Ford Foundation.
"Credit unions have a long history as being the proving ground for consumer-centric, innovative financial products," said Cynthia Campbell, Filene's director of Innovation Labs. "Partnering with the federation to test 'Borrow & Save's' viability with mainstream financial institutions was a natural fit, since their experience in working with low- to moderate-income consumers is extensive."
"Borrow & Save" increases members' economic security by providing an affordable small-dollar loan with payment terms that make sense for the member, giving them an alternative to predatory lenders. A built-in savings component also enables members to self-fund their emergencies instead of borrowing money to handle them.
"The large number of credit unions interested in participating in the 'Borrow & Save' pilot reflects the need among low-income consumers for affordable loans that provide a safe alternative to predatory lenders," said Cathie Mahon, federation president/CEO. "'Borrow & Save's' unique mandatory savings help consumers strengthen their financial condition by building credit and developing a cushion against future emergencies."
Credit unions that will test the 'Borrow & Save' product include: