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July 24, 2009
Kollel highlights HFLA
Topics include micro-credit and micro-lending.
BLAIR KAPLAN
One of the first agencies set up in a Jewish community, even before a school or synagogue, is an organization to assist members with interest-free loans. On July 14, more than 50 professionals gathered at the Kollel Business Club, organized by Rabbi Shmuel Yeshayahu, to learn more about this mitzvah.
At the Kollel Business Club's 15th gathering, Shirley Barnett spoke about the concept of micro-credit and micro-lending, practised by the Hebrew Free Loan Association of Vancouver (HFLA).
"Micro-credit generally means the provision of small loans to individuals to finance them with income-generating activity," said Barnett. Micro-lending is the lending that reflects the giving of small loans and "works best in a group of common denominators," she explained.
Originating with the Grameen Bank in Bangladesh, micro-credit has allowed people to become self-employed and to generate their own income. The giving of a small amount of money to someone can supply a person with the opportunity to obtain resources needed to work and being able to work helps in generating income, meaning that the loan can then be repaid.
The HFLA of Vancouver assists members of the local Jewish community by granting interest-free loans. The mitzvah of gemilut chasadim, translated as "deeds of loving kindness," is what fuels their work. Barnett, a founding member of the association, strongly believes in this type of loan model. Similar agencies have succeeded all over the world, working best in communities that were one step above poverty, but Barnett found a way to make it work in the B.C. Jewish community.
Previously, Barnett was the head of the Jewish Family Services Agency, where she realized the potential that was missing from lending agencies in Vancouver. Stemming from historical examples, such as the Grameen Bank, she took action.
In 1979, Barnett set up the Hebrew Assistance Association of Vancouver, which later became known as the Hebrew Free Loan Association of Vancouver.
The loan process is simple and every application gets reviewed, said Barnett. Following the submission of an application, a meeting is set up with the director of the HFLA. The applicant's guarantors are then contacted to authenticate eligibility. Pending approval, the application is then presented to the board of directors of the HFLA and, if the loan is granted, the applicant will sign a promissory note, which entrusts them to pay back the loan.
A legal document is also signed by the guarantors, who commit to repay the loan if the applicant is unable to do so. Once the paperwork is complete, the applicant receives a cheque. The monthly repayment amount depends on the size of the loan and requires postdated cheques from the successful applicant.
The reason this loan model is so successful is because it's "giving people the tools to help them reach the next level," said Barnett. There is "responsibility that is developed or driven into people," she said.
Currently, there are about 250 HFLA loans out in Vancouver. The maximum loan available is $5,000 and the processing of the loans occurs every two weeks. Common reasons for taking out a loan include dental care expenses, payment of tuition or sending a child to summer camp, explained Barnett. Though there is no interest, it is expected that the loans will be paid back – the money is not intended as a handout but is meant to help the applicant get on their feet, she said.
The HLFA raises money through a $36 annual membership, by hosting small events and raising private donations. There is very little marketing done about the HLFA and a majority of referrals are by word of mouth or through community agencies. Once loans are repaid, the money is recycled into the association to be lent out to new applicants.
Blair Kaplan is a freelance journalist from Vancouver who has a diverse background in communications. For more information, visit blairkaplan.ca.
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