Community Action, Greenfield Savings start micro-loan program

For the Gazette
Sunday, May 27, 2018

TURNERS FALLS — As John Howland began to learn about the needs of the branches and communities when he assumed position as president of Greenfield Saving Bank three years ago, the branch manager in Turners Falls grabbed his ear: We need a micro-loan program here.

At first Howland thought that branch manager Linda Ackerman meant something like a $5,000 loan. Not quite, said Ackerman, who’s been with the bank for 25 years. Instead, she told him that she kept seeing her customers come in and ask to borrow say $100 or $200 to fix a car. With the bank’s structure of lending, though, Ackerman had to turn them away, which, she said, was “always a little sad that I couldn’t fill a need, because I wanted to say, ‘yes, we’re the can-do bank.’”

Three years later, Ackerman helped to push Howland to create a program for people in need of a little of assistance for an unexpected cost.

Starting in June, Community Action Pioneer Valley — in partnership and supported by a $10,000 donation from Greenfield Savings Bank — will provide qualified applicants with one-year loans up to $500.

“It’s an idea and now we’re bringing it to the table,” Community Action Executive Director Clare Higgins said on Wednesday. “We’re going to see what happens and we’re going to learn some things. If we’re not learning something, we’re probably doing something wrong.”

What’s to learn is how this program will function, first in Montague and possibly elsewhere, depending upon how it goes and what will people exactly need this loan for.

There are some existing ideas of what program will be useful for, like car loans or an unexpected bill, but it’s not intended to fund recurring costs, said bank and Community Action representatives.

Pairing with this loan program, which will not have any interest attached to it, will be monthly financial counseling, until that maximum $500 loan is paid off within the year from taking it out.

A critical part of the initiative, Higgins explained, is Community Action will not only try to hook up the Montague resident with a potential loan, but also with other assistance programs for which they may be eligible.

After getting a snapshot of someone’s financial profile, Community Action can assess where else they could help out someone. For example, they might qualify for fuel-assistance or for Women, Infants, and Children (WIC) program. Community Action will not push this on anyone, though. If someone wants this additional help, it will be there for them.

While a $500 loan to fix a problem that popped up with a car may be the reason someone comes in for help, Higgins said, the other sources of financial help might be a way to make a person’s tight budget have a little more breathing room, so that next time they might have that $500 already saved away. Whatever help they can provide, Higgins hopes this new program will “help bridge that gap” for Montague residents in need of a little assistance.

Ackerman said that during her tenure at the bank, there have always been people asking for these “mini-loans,” but that in recent years there has been an uptick in such requests. She cited the closing of the paper mills and loss of other longtime, well-paying jobs as a contributing factor. Even when people take a new job, she said, it doesn’t mean that they will get the same pay as they once did.

“The prosperity that so many Americans are enjoying is not being enjoyed by everybody,” said Howland in echoing Higgins’ earlier sentiments, and this program is designed to do what it can to help.

“This is a very important community to us,” Howland said about Montague, where the branch has been since 1870 after opening in Greenfield in 1869. “We’re very committed to this community and proud to be doing this.”