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a. The Collaborative will establish a savings account in the name of The Michael Clements Mini

Loan Program with a financial institution. This savings account is used to provide the cash

collateral for the Neighbor in Need loan. Since the collateral will be tied to the remaining

balance of a loan, every payment made replenishes the amount available for further loans. The

goal is to roll over the loaned money multiple times for greater leverage of capital invested.

b. SVdP volunteers make home visits prior to loaning money to establish if the Neighbor in Need

is willing to take ownership of their financial situation, agree to repay the loan, sufficient

monthly income, and willing to accept the help to achieve Systemic Change. The home visit

also establishes their ability to repay the loan and identify if the moral character exists to support

the mini loan program. If the visiting SVdP volunteer qualifies the Neighbor in Need, he/she

will present a package to the Executive Board with a recommendation to approve the loan.

c. The SVdP volunteers prioritize financial literacy, developing a budget, and establishing credit.

These are the essentials of Systemic Change.

d. Loans are granted by the following process:

1. The SVdP volunteer makes a recommendation for loan approval to the

Executive Board,

2. The Executive Board approves the loan, and

3. The Liaison visits the credit union to sign a simple collateral agreement for the

specific amount during a specific repayment period (not more than 3 years) for a

specific Neighbor in Need,

4. A volunteer then notifies the Neighbor in Need to, open a credit union account

and fill out a loan application after which the loan proceeds are immediately

deposited principal is paid by the financial institution to the Landlord or

property owner. The loan funds are never provided to the loan applicant or

neighbor in need. into the The Neighbor in Need’s new account and freezes a

portion of the Mini Loan Program’s savings account balance becomes “frozen”.

e. Loans are granted at 2% interest with above what the credit union or bank is paying on its

regular savings accounts, and no loans offered for more than 5 years.

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