Nusenda Credit Union Foundation will be one of three Herb Wegner Memorial Awards presented at the annual fundraising gala hosted by the Foundation at the Marriott Marquis on March 11, in conjunction with the CUNA Governmental Affairs Conference in Washington, D.C.
Registration for dinner sponsorships and tickets will be available on the Foundation website (ncuf.coop) later this year.
“What Nusenda Credit Union Foundation has accomplished with their Co-op Capital Program is an excellent template and prototype for duplication and scale throughout the credit union movement,” said John Gregoire, chair of the Foundation’s Wegner Awards Selection Committee and president of The ProCon Group. “Their targets and successes hit right at the heart of those consumers for who credit unions were organized to serve.”
The Nusenda Credit Union Foundation (Nusenda Foundation) was founded in 2014 to better serve low-income people within New Mexico, specifically in the nine communities serviced through Nusenda Credit Union.
Shortly after establishment, the Nusenda Foundation began a discovery process to modify and scale one of Nusenda Credit Union’s existing loan programs, the SEG Pledge Loan. This microloan allows Nusenda’s business account holders to offer small dollar loans to their employees by pledging the employer’s savings account as collateral for the loan without requiring a credit check.
Recognizing that this type of loan could be life changing for the people they serve, Nusenda Foundation began analyzing other alternative lending models to identify best practices for replication. Additionally, Nusenda Foundation met with over 150 stakeholders in New Mexico to determine how to further adapt the alternative lending model to the unique needs of the community. Through this discovery and research, Nusenda Foundation created the Co-op Capital Program.
Co-op Capital is a collaborative lending model in which the loan application and underwriting process is redistributed to community-based organizations so that they become the “face” of the microloan program. This allows the borrowers in the community to access loans through trusted organizations in which they already have built relationships with. As loan payments are made, the funds held as collateral in savings accounts replenish and more individuals gain access to loans. Rather than a revolving loan fund, Co-op Capital uses a revolving collateral fund.
Co-op Capital's approach challenges traditional and even alternative models of lending. As of Q1 2018, Co-op Capital has lent $663,466 to 363 borrowers, averaging $1,828 per loan and boasting only a 1% default rate. The Nusenda Foundation continues to scale this financial product, increasing geographic scope and depth of reach within communities.
The Nusenda Foundation’s mission is to create stronger communities where the credit union’s members live and work through collaborative partnerships and by investing in innovative solutions to improve education, health, social, and economic outcomes.
The Nusenda Foundation’s many partners embody a spirit of cooperation. Co-op Capital began with three SEG members offering their own member-based services to promote the principle of cooperation among cooperatives - La Montañita (a farmer/grocer co-op), IATSE 480 (the local film union), and NOEL Corp (a concrete contractor).
Recognizing its effectiveness and the opportunity to adapt and scale the product, the Nusenda Foundation partnered with the University of New Mexico Foundation and Central New Mexico Community College to adapt the product for students in colleges and universities. Significant membership and asset growth, as well as expanded partnerships and sites offering Co-op Capital have followed, signaling that this work is effective and valuable in communities throughout the state.
Together with the University of New Mexico, the Nusenda Foundation worked to implement “Powering Success,” an adaptation of the Co-op Capital Program to students in need of emergency funding. Many of the university’s students are low income, and many of them will be the first in their families to graduate. Powering Success offers accessible small dollar loans to help these students stay on track while connecting them to important financial resources to set them up for a better financial future.