By Madina Toure
The Greater Flushing Chamber of Commerce has launched a credit-building and financial-education program for area entrepreneurs and residents.
The program, called the Flushing Lending Circle, was developed by the chamber in partnership with Chhaya Community Development Center in Jackson Heights and Mission Asset Fund in San Francisco.
The Flushing Lending Circle will provide a zero-interest loan to help participants build credit. Anywhere from six to 10 people will be selected through a screening process and then they will decide on an amount for their group loan.
Each individual will make the same monthly payment ranging from $50 to $100, which would then be reported to credit bureaus. The loan pool rotates each month until each individual in the lending circle has a chance to get the money. The program helps participants establish credit scores for the first time or improve damaged scores.
“The chamber believes that economic opportunity is something that everyone should have access to and credit has often been the biggest barrier to people starting a business or growing a business or sometimes even getting a job,” John Choe, the chamber’s executive director, said.
Immigrant communities use informal lending circles to generate capital when they are unable to access mainstream bank loans. The tradition is known as “keh” among Koreans, “biaohui” in Chinese, “tandas” among Latinos and “susu” in the Caribbean community.
The pooled funds are often used to start businesses, purchase a car or put a down payment on a home.
The Flushing Lending Circle is a free program open to the entire community, partly funded through a grant from the Korean American Community Foundation.
All participants must participate in financial-education classes and must have a valid email address, social security or taxpayer identification number, a checking account and proof of income.
Choe said state Assemblyman Ron Kim (D-Flushing) is supporting the program because a bill recently passed by Gov. Andrew Cuomo calls on nail salons to have a wage bond—which can only be seured through personal credit—to protect workers in the event that a business closes and does not pay its workers.
Tshering Gurung, a financial empowerment coach at Chhaya, said Chhaya is the first nonprofit to pilot the peer lending circle program in New York City.
Last year, the nonprofit generated a zero-interest free loan volume of $16,000.
“We are proud to partner with the Greater Flushing Chamber of Commerce to expand this program beyond the South Asian community,” Gurung said.
Financial industry experts will teach free workshops on financial management, planning, insurance, investing, retirement planning and long-term care. The chamber will be partnering with EastWest Bank and World Financial Group to organize the workshops and offer counseling.
Reach reporter Madina Toure by e-mail at mtour
