Mission Versus Business
Here’s a fundamental challenge in our business: the greater the alignment between our lending and our mission, the greater the strain on our loan portfolio performance. Phrased another way, the highest impact loans–those to ex-offenders, domestic violence survivors, and the temporarily homeless– are also the riskiest. This is through no fault of their own; rather, it’s simply a result of the tremendous strain that personal and financial instability places on a person.
As a nonprofit, it is incumbent on us that we adhere to our mission, which is to use financial services to create pathways out of poverty. Yet as a business, especially as one that debt finances its lending operations, we must also ensure that we are fiscally sound. To address this tension, we’ve taken several approaches. First and foremost, the interest rates we charge are designed to compensate for higher losses