Latinos’ Bad Credit, No Credit, Big Problem: TWLC Interviews Progreso Financiero’s James Gutierrez
“In this country if you don’t have a credit score, it’s like not having a face.”
-James Gutierrez, Progreso Financiero
Because of the global financial crisis, we know how integral credit is to economic growth, recovery, and overall U.S. competitiveness. Eyes glazing over? It’s also vital to YOU–the middle class. No, not spending what you have and don’t on passing trends to keep up with the Kardashians. Credit in the form of home and student loans helped expand the U.S. middle class in the 20th Century. As millions of GIs will attest, credit allows for smart investments which fling open the door to upward mobility.
Nearly 25 million Latinos have abysmally low credit scores, making it virtually impossible for them to access credit. This threatens our fragile economic recovery because the more difficult it is for them to secure loans for homes, small businesses, and college, the harder it becomes for them to generate wealth, stimulate our economy, and build communities. This matters because as the Census results show, the number of Hispanics is growing exponentially. No politics, just math.
Instead of waiting for a government solution, one entrepreneur decided to act. Armed with a Stanford MBA, Gutierrez, co-founded Progreso Financiero, a lending institution that combines micro-credit principles lifting communities out of poverty in the developing world, with hallmark free market strategies which have historically generated wealth.
Watch the Wise Latina Club interview with Progreso Financiero’s James Gutierrez here:
His idea is simple: lend manageable amounts to individuals according to their income and monthly budget at a total of 36% APR (far less than what “underground lenders” charge) and within about a year, the borrower pays off the loan and has started to boost her credit score because Progreso Financiero reports to the bureaus. Eventually, these borrowers will be empowered with choice: options to build their wealth including banking at mainstream institutions. Starting or expanding a business, buying an affordable home, and sending children to college all positively impact families, communities, states, and our country.
Gutierrez isn’t the first American to recognize the importance of integrating underserved immigrant communities though access to mainstream financial options. At the beginning of the 20th Century, A.P. Giannini founded the Bank of Italy which later became the Bank of America.