NYT: In Lending Circles, a Roundabout Way to a Higher Credit Score

Earlier this week, The New York Times published a feature on new initiatives aimed at bringing informal savings groups into the formal financial sector:

While informal lending circles among families, acquaintances, co-workers and neighbors are familiar to hundreds of millions of people all over the globe, they are rarely recognized by mainstream financial institutions.

But now these centuries-old networks are being seen as a promising tool to help low-income Americans build credit records, part of a new frontier of the war on poverty that has attracted a crazy-quilt coalition of supporters that include major banks, immigrant activists and academic researchers. In August, California became the first state to enact a law allowing nonprofits to offer small no-interest, no-fee loans, attracting unanimous support from Republican and Democratic lawmakers.

The piece also highlighted the recently published USFD issue brief, An Invisible Finance Sector.  To read the complete article, click here.