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Borrow & Save Success Stories & Related Impact Banking Initiatives - Nicole Pendleton, Community Development

Borrow & Save Success Stories & Related Impact Banking Initiatives - Nicole Pendleton, Community Development Analyst. About Freedom First. About Freedom First. Mission: Helping our members prosper – helping our communities thrive. Headquarters : Roanoke, VA Year Chartered: 1956

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Borrow & Save Success Stories & Related Impact Banking Initiatives - Nicole Pendleton, Community Development

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  1. Borrow & Save Success Stories & Related Impact Banking Initiatives - Nicole Pendleton, Community Development Analyst

  2. About Freedom First 2013 Annual Conference : Financial Inclusion Through Cooperative Finance

  3. About Freedom First Mission: Helping our members prosper – helping our communities thrive • Headquarters: Roanoke, VA • Year Chartered: 1956 • Charter Type: Community • Roanoke MSA • Montgomery County (Virginia Tech) and Radford City • Membership: 45,859 (61% LMI) • Assets: $310M • Designations: • NCUA Low-Income, 2010 • US Treasury CDFI, 2010

  4. Strategic Outcomes

  5. Strategic Outcomes

  6. The Community Development Team

  7. Impact Banking Products • Borrow & Save • Credit Builder • IDAs • Micro Loans • Payday Alternative Loans • TGIF (The Goal is Freedom) • Responsible Rides • Federal Home Loan Bank of Atlanta Set-aside and DPA Programs • Affordable Housing Program

  8. Impact Banking Products • 2010: $1,298,824 ($803,262) • 2011: $1,041,254 ($748,040) • 2012: $1,745,706 ($1,411,717)

  9. Borrow & Save Parameters • 12 – 36 month repayment period • $250 - $5,000 • Max 18% APR • No Application Fee • 50% of loan amount into locked savings account, released at maturity, for planned savings

  10. Results: 2Q2012 - Jan 31, 2013 • Weighted average interest rate: 15.54% • Average income: $2,400/month ($28,800/year) • Average credit score: 577 (range from 0, 421, to 721) • 38 had no credit score • 140 loans: $255,266 • 150 savings accounts: $129,395 • 25 “slow-pay*” loans: $44,113 • 5 charge-offs: $3,500 • 52 new members *impact banking accounts are considered slow pay at 1 day past due, allows Risk Management to contact member sooner

  11. Success Stories • Linda: • Single mom starting Community College and needed $500 to assist with books. Limited credit; received loan and financial education. • Wanda: • Single mom expecting first grandchild. Due to not receiving expected child support for a period of time, bills got behind. Loan paid off delinquent debt and consolidated bills, strengthened credit, now in Responsible Rides • Tamura: • Single mom who had several small, older collections. Qualified for Responsible Rides, referred for Borrow & Save, and is working to repair credit while saving for down payment, also pre-qualified for AHP program. 2013 Annual Conference : Financial Inclusion Through Cooperative Finance

  12. Keys to Success • Financial Education/Development Services • Hardship Letter & Alternative Underwriting Guidelines • High touch exposure • Keep it simple • Cross-sell; access to other Impact Banking Products • Ultimate goal of transitioning to Conventional Products 2013 Annual Conference : Financial Inclusion Through Cooperative Finance

  13. Questions? 2013 Annual Conference : Financial Inclusion Through Cooperative Finance

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