Barrio published a Microlending Feasibility report and launched 2 Lending Circles in partnership with Riverfront FCU. The preliminary data looks promising, and Barrio plans to launch additional Lending Circles this year. If you are interested in the story, please read on. If not, click here to go directly to the report.
Phase I: I have an idea
At the height of the pandemic, a local funder approached Barrio with an unusual request… They were interested in funding a Lending Circle program in Reading.
“With all due respect, we are a community building arts organization. Why are you asking us?,” we replied.
“Lending circles require trust. I hear that Barrio is deeply rooted in the community. It seemed like it could be a match.”
Our curiosity was piqued, but we needed more research.
Phase II: Community Inclusion in Program Design (Who are we building this for?)
Our secret to success is very simple. Before we pilot a program, we talk to those who will be impacted to determine the need. The funder understood our commitment to live our principles and respected our role as a trusted institution in the community to conduct a feasibility study. The resulting 17-page report, published on our website, investigates community appetite and local capacity for such a program and outlines our findings. Spoiler alert: there was a need!
Phase III: Develop Strong Partnerships
Just because a need exists, doesn’t mean Barrio should or could try to address it. Barrio is not a lending institution, and our Board expressed capacity concerns. Barrio often dances at the edge of possibilities, and we needed a partner who was willing to think and dream with us creatively. After several unsuccessful attempts at finding a strong partner for the project, the cream rose to the top. Riverfront Federal Credit Union stepped forward to support the model. As soon as they heard our proposal, they welcomed the idea and said it fit nicely in their mission of helping people of modest means meet their financial goals.
Phase IV: Launch Minimum Viable Pilot Project
The Barrio model is based on agile implementation, learning fast and failing forward. We launched 2 pilot lending circles in the fall of 2021. The first circle supports micropreneurs, while the second focuses on small personal loans to support credit repair for individuals. The circles meet regularly to hold each other accountable and receive business and financial support.
Phase V: Monitor, Modify and Amplify
To date, we have a 100% on-time repayment rate for these first two pilot Lending Circles. In April, 2022 we will be holding several information sessions for our next round of Lending Circles, which should launch later in the Spring. If interested, feel free to reach out to [email protected] to make sure you hear once the session dates are announced.
You can read our entire report by clicking below