A decade ago, a Brown University graduate student hatched an idea to help Rhode Islanders with low incomes deal with the difficult financial realities of the new century. Capital Good Fund founder Andy Posner could not have imagined how successfully he would execute that mission.
Well, actually, he could imagine it, he said in an email to the organization’s followers. And perhaps therein lies a lesson for all would-be entrepreneurs.
Mr. Posner saw a need in perennially underserved communities, the need for access to capital, even microloans, whether to start a new small business or finance a car that would allow the borrower to get to a job that would pay the rent. Its first loan was for $700, helping to finance an application for U.S. citizenship.
These were people who traditional lending institutions would not serve and who were preyed on by payday lenders and the like, organizations that can legally charge more than 200 percent interest on cash advances against a paycheck. In many cases the borrowers are stuck in a never-ending cycle of taking out loans to pay off previous loans.
Today the Capital Good Fund operates in Rhode Island, as well as Delaware, Florida and Massachusetts. Last year it financed $3 million in loans. Among its supporters are banks, the U.S. Treasury Department, foundations and religious organizations.
It has more than $5 million in assets and a 96 percent repayment rate. It is, by all measures – financial and social impact – a raging success.
So happy birthday, Capital Good Fund. You deserve to take a bow.
