CCHD: Catholic Charities of Salina Expands Microloan Project

By Sarah Ennis, NCRLC Intern

A woman arrived recently at the Catholic Charities of Salina, Kan., in a sticky situation.  She had accumulated high interest debt and owed money to three different payday lenders.  With no credit history, no bank relationship, and limited financial knowledge to begin with, this woman was in a tight spot.  Thankfully, the Catholic Charities was equipped to help.

Since 2008, Catholic Charities of Salina has been helping the people of Saline County rise out of high interest debt, attain small, short-term loans called microloans, and develop good standing with a local bank through the Salina Area Savings and Education Loan Program (SAASE).  Through this pilot program, Catholic Charities and other community partners have been able to offer loan assistance and valuable support for low-income clients to establish credit and banking history.

Director of Catholic Charities, Karen Hauser, saw the success of the SAASE Program and soon had plans to expand its touch beyond the Saline County.

“We have seen people establish saving and checking accounts and have even seen people taking out loans to buy a car,” she said.  “We thought, ‘We really need to expand this.’ We want to establish learning circles in order to teach people how to build their own credit.  We want to have communities themselves take responsibility for these projects in their own communities.  That will give [the project] the best chance of surviving in each community.”

When NCRLC staff member, Beth Hyser, called the Diocese of Salina last fall on the hunt for potential projects to apply for the Catholic Campaign for Human Development funding, Hauser saw her opportunity.

“That was the opening – [Beth] calling,” Hauser recalls.  “I had a plan, but I was looking for funds to staff it.  She really encouraged me to write the grant [request for CCHD funding].”

With the support of the CCHD grant to hire staff, and the backing of the Methodist Health Foundation to guarantee bank loans, Hauser hopes to bring the small Salina micro lending project out into five rural communities of the Salina Diocese.  Catholic Charities will hire a project coordinator and a part-time assistant who will travel throughout the rural diocese ensuring that the poor of each community have access to affordable bank loans and are incorporated into peer leadership circles for continued financial education and mentoring.

Hauser is excited about getting each rural community involved in the expansion of the loan project.  Already, she is connected with the Sisters of St. Joseph in Concordia, Kan., and hopes to continue to partner with them and numerous local churches to set up the “learning circles” and help economically vulnerable people establish footing with a bank.  Hauser also described how she wants each group to raise up leaders within the circle to maintain peer accountability.

“I want to get the participants involved, too, so that they can become leaders,” she said. “The peer support and education is not something they get in school.”

With the crucial CCHD funding arriving this fall, the prospects for the Catholic Charities Loan Project look bright, especially in the rural outposts of the Salina diocese. Should other people show up on the steps of Catholic Charities beyond the reaches of Saline County, deep in debt, they will be well taken care of.

Click here for more info on NCRLC’s work with the Catholic Campaign for Human Development.

Photo: An employee of Catholic Charities of Salina teaches a financial literacy class.

This article originally appeared in the Summer 2012 issue of Catholic Rural Life.