In 2016, University United Methodist began offering interest-free micro-loans of up to $1,000 to existing small businesses and start-ups in greater Austin, Texas.
Through their experience, they developed this two-Sunday curriculum and PowerPoint to introduce church members to church-based micro-lending. They’ve made these resources publicly available congregations. Here is their story, along with the Curriculum and Powerpoint.
Church Based Micro-lending: An Experiment in Radical Grace
It has been 18 months since University United Methodist Church (UUMC) began offering interest-free micro-loans of up to $1,000 to existing small businesses and start-ups in greater Austin, Texas.
The benefits and lessons learned are expanding our vision of what “God’s Econ-omy” can look like and creating a new “community-wide neighborhood” for our central city church of 450+ members.
We credit the Criterion Institute and the Austin Presbyterian Theological Seminary for introducing us to church-based micro-lending in a day-long workshop two years ago — and inspiring us to tailor a micro-lending effort to fit our congregation.
This two-Sunday curriculum and powerpoints were developed by University United Methodist Church to introduce church members to church-based micro-lending. Their powerpoint presentations for those forums are available as a resource for other congregations.
By choice, the UUMC Community Micro-lending Program is not part of the church budget. It is funded solely by donations from church members and loan repayments. To date, we have retired two $1,000 loans (repayable over a year) and have another five $1,000 loans in repayment.
Each of our micro-loans aligns with UUMC’s social justice missions spanning workers’ rights, immigrant rights, environmental protection, care for the homeless, and support for children and families.
Identifying borrowers remains our biggest challenge, but by expanding our work-ing relationships with non-profit community partners — like Workers Defense, Caritas, Manos de Cristo, Avance, Mobile Loaves & Fishes, and Foundation for the Homeless — we are meeting our neighbors who need small amounts of money to stabilize or expand a small business.
UUMC has made loans to an artist creating jewelry from recycled materials, a glassblower who was formerly homeless, a caterer who is now providing jobs for persons “getting back on their feet,” and an immigrant roofer who advocates publicly for improv-ing worker safety and ending “wage theft.”
Our latest loan recipient is a mother of four who named her home business Gela-tinas y Mas Postres Adonai because she believes her baking talent comes from God (Adonai) who “provides all things.”
A “think tank” of a dozen church members shepherds UUMC’s micro-loan pro-gram and enlists others to help interview loan applicants, provide Spanish-language translation, and mentor borrowers.
Some lessons learned:
- requiring at least four UUMC members meet with loan applicants during a two-step interview process,
- checking an applicant’s two required references,
- providing brochures and simple loan contracts in English and Spanish,
- incorporating borrowers’ suggestions to improve the micro-loan program, and
- remaining flexible and providing ongoing support to encourage full repayment.
UUMC’s Community Micro-lending Program humbles us in its scope, energizes us through relationships with people we might not otherwise meet, and challenges us to be the Church.
In balancing due diligence and “radical grace” in awarding loans, we have found that tipping the balance towards grace has served us well.
—Janis Monger, Chair, UUMC Community Micro-lending Program