OHA micro-loans meant for crises, careers
By Vicki Viotti
Advertiser Staff Writer
Native Hawaiians will have access in a few months to a new "micro-loan" program that offers help to overcome temporary cash-flow problems and pursue career opportunities.
It's the latest effort by the Office of Hawaiian Affairs to refine its approach to lending, which also led to a decision to retool its Native Hawaiian Revolving Loan Fund, a program aimed at kick-starting new business enterprises.
However, micro-loans are not meant for businesses but for weathering life's crises, such as a death in the family, said Haunani Apoliona, OHA chairwoman, at her year-end speech last week.
"Native Hawaiians, in undergoing a financial hardship, can borrow up to $7,500 for emergencies such as funeral expenses, mortgage payments, auto repairs and emergency medical care," Apoliona said.
According to the program adopted by OHA trustees in November, career-development activities, such as courses or the purchase of equipment required for such classes, also could be financed by a micro-loan.
The board of trustees appropriated $500,000 at its November meeting on Moloka'i.
OHA staffers hope by the end of February to nail down procedures, line up the needed staff and start accepting applications. The interest rate is projected at 5 percent, which means a maximum loan of $7,500 would be repaid in five years with monthly payments of $141.
These are not low-income loans: Applicants would be evaluated for their credit history and ability to repay. This aspect sets it apart from another OHA program, a fund that issues smaller loans through the agency Alu Like. In this "Multi-Service Program," applicants must show need and an inability to qualify for other financing.
Apoliona touted both the new program and the eight new business loans issued this year under the established revolving loan fund. Last year the fund lost its $1 million annual financing from the federal Administration for Native Americans, which judged that too few loans were going out.
In a unanimous vote on Wednesday, trustees adopted the recommendations made by consultants and by the revolving fund's advisory board. These include:
- Increasing loan activity by seeking a higher loan ceiling than the one the federal agency now allows and by asking the agency to ease other restrictions.
- Charting the program's successes by keeping track of participation in its technical training classes that help fledgling entrepreneurs draw up a business plan.
- Expanding its training efforts, reaching more than loan applicants.
Reach Vicki Viotti at 525-8053 or email@example.com.