Banking: With a 'Microloan' for a Truck, Family Leaves Welfare
Kristen Boyer, a bank vice president accustomed to spreadsheets and interest rates, is inspecting the new paint job on James Metzgar's pickup in his backyard in rural Pike County, Ohio. "Jim's Pick 'Em Up and Recovery," the lettering on the bright blue truck reads.</br></br>"It really looks nice," the banker assures Mr. Metzgar, raising her voice above the barking of his dog, a black chow tied to a nearby tree.</br></br>It's an unlikely spot to find a business lender, but Ms. Boyer is a banker who operates in a realm where poverty policy converges with commerce. She serves on the board of the Pike County Community Action Committee, a close-knit group of bankers and community leaders that helps poor people gain a toehold in the working world.</br></br>The committee evaluates "microloan" applications to start tiny new businesses, and provides follow-up advice and training to help them along. Many borrowers are like Mr. Metzgar-struggling to leave the welfare rolls, but unable to find a job. "These are basically character loans," says Ms. Boyer.</br></br>The notion that small loans, in the hands of poor people, can make a huge difference had its genesis in Bangladesh and other underdeveloped countries, where groups of villagers extended tiny loans to one another to start cottage industries. The first microenterprise programs spread to the U.S. in the mid-1980s, often targeting women and minority entrepreneurs. Since then, the small-bite approach to poverty has become increasingly popular, as states take greater control of their welfare programs.