Catholic charity offers “microloans” to help borrowers avoid payday lending

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As some Ohioians get caught in the payday loan cycle with interest rates as high as 500 percent, a local Catholic organization offers a unique and low interest way to borrow money.

The Society of St. Vincent DePaul began their microloan program in Licking County in 2016.

“There is a big need for people who are working poor or underfunded,” Jim Jackson, Program Director of the microloan program in Licking County said.

According to Jackson, borrowers are able to receive up to $500 to use toward four specific reasons.

The loans are limited to car repairs, educational expenses, health expenses, or housing expenses that make a home unlivable.

The director said borrowers are then given about 12 months to repay the loan.

With this program, borrowers are given a loan at the lowest interest rate banks are allowed to charge - for loan recipient Chris Wills that meant 3 percent ---a big difference from the high interest rate many payday or title lending services offer.

“I feel that it’s going to be helpful to the working poor class and a lot of people don’t have bank accounts, checking accounts, saving accounts, or even have credit to get loans,” Wills said.

The microloan program was made possible by an anonymous donation of $100,000. The donation was divided by the first five participating counties - Licking, Franklin, Ross, Delaware and Fairfield.

Organizers say by the end of the summer the program will also be available in Knox county.