Prepared by Laura Benedict, August 2010
with funding from the sponsors of the Ian Axford (New Zealand) Fellowships in Public Policy
Laura Benedict is Vice President and Director, Development, Communications and Policy at Self-Help in Durham, North Carolina – the largest social lender in the United States of America. This 30 year old non-profit “bank” has invested over $5 billion in low-income and minority communities. Before joining Self-Help’s staff in 1989, she worked with Catalyst, a national non-profit women’s organization and taught English in China. She received her undergraduate degree from the University of Chicago and her MBA from the University of North Carolina.
During Laura’s Ian Axford Fellowship exchange to New Zealand she was based at the Ministry of Social Development and Philanthropy New Zealand in Wellington, where she researched opportunities social lending offers to New Zealand’s public and private grantmakers as well as social enterprises, non-profits, iwi, and low-income communities.
This report discusses the opportunity social lending offers New Zealand’s public and private grantmakers as well as social enterprises, non-profits, iwi, and low-income communities. It describes the three types of social lending: lending to social mission organisations, small businesses owned by or employing disadvantaged people, and low-income individuals to help them avoid loan sharks and improve their financial stability.
It explores the lending implications of Māori historical disadvantage and the challenges of Mäori cultural preferences on accessing credit, especially for collectively owned enterprises.
It introduces intermediaries which act as go-betweens for funders and communities and it profiles Self-Help, the author’s US organisation, and two Kiwi social lenders: Prometheus Finance and Awhi Credit Union. A table of New Zealand’s other social lenders is included.
It pulls these strands together into recommendations for a Kiwi social lending system that includes intermediaries to fill gaps in the current environment, a Māori-funded guarantee for loans secured by collectively owned land, and expansion of credit unions serving low-income communities.
The final chapter describes ways the government might support these developments. Social lending should remain outside the government. Legislation, regulation, and tax policy, however, could be designed to remove barriers and support the growth of social lending.
Acknowledgments
Executive Summary
Preface
Introduction
Conclusion
Bibliography
Appendix 1: Summary of Aotearoa New Zealand’s social lenders
Appendix 2: Native American loan guarantee eligibility criteria
Appendix 3: Self-Help’s 2008 loan guarantee terms and concept paper
Appendix 4: Intermediary partner roles
Appendix 5: Mark von Dadelzen’s discussion of the charitability of altruistic lending
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