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Free Loan Association plans to open in Milwaukee
June 22nd, 2009
Milwaukee’s newest recycling program brings a whole new meaning to the term “going green.” But the Milwaukee Jewish Free Loan Association (MJFLA), which aims to open for business in September, is rooted in a tradition that stretches back more than 100 years.
By the turn of the 20th century there were some 500 Hebrew Free Loan or Gemilut Chesed (acts of lovingkindness) societies in the United States. Ginny Gendelman, MJFLA’s founder and executive director, explained their genesis.
“Jewish people were not able to get personal loans, so, as has often been the case, they got together and helped themselves,” she said.
With repayment rates among Hebrew free loan borrowers exceeding 99 percent, banks eventually realized that they were depriving themselves of a highly desirable market segment and began loaning to Jewish borrowers in the 1940s, Gendelman said.
At that point, many free loan associations went on to do other kinds of work. But enough continued that when Gendelman began the process of building MJFLA, she didn’t have to start from scratch.
“The International Association of Hebrew Free Loans (IAHFL) provided an established business model for us to follow,” she said.
In addition to helping MJFLA in obtaining non-profit status, the incoming president of the international organization has traveled to Milwaukee to meet with groups of potential supporters in order to raise the $150,000 needed to fully capitalize its loan fund.
That will enable the organization to make five interest-free loans per month, with repayment starting a month after the loans are granted. Loan amounts will range from $1,000 to $3,600; repayment schedules will vary from one to three years.
The original free loan associations were created by and for Jews. But religious affiliation will not be among MJFLA’s criteria. All loans will be confidential and provided on a non-sectarian basis.
The loans are geared for people in crisis who have short-term needs. “They are not handouts,” Gendelman said.
Borrowers will have to be current residents of the Greater Milwaukee area, be employed or have other verifiable repayment ability and have two Wisconsin residents as co-signers.
She first heard of free loan societies while living in Los Angeles. Working full time as an architect, she was unable to get involved with the association then. But it got her thinking.
“When I became aware of it, I thought that that was the greatest job and that if I could have any job in the world it would be to loan funds to people who were in need,” she said.
When she and her family moved to Milwaukee three years ago, she was enthusiastic about getting involved with the local free loan society. After discovering that none existed, she focused her energies on volunteering for the Milwaukee Jewish Day School, where her daughters are students, and for other Jewish and local causes.
Through that involvement, she saw a need for a free loan society and began talking to other community members. She and team comprised of Florence Steinberger, Lynne Pearson, Moshe Katz and Mark Goldstein began building the plan for the Milwaukee society.
The society’s concept of mutual support appeals to its initial supporters, Gendelman said. “Donors know that their money is helping people and recipients know that when they pay their money back, it will go out to help someone else.”
In addition to monetary pledges, the organization has received donations of office furniture and free office space for as long as the donor owns the building. Gendelman and Steinberger, the loan coordinator, have pledged to work as volunteers for the first two years.
Donors to the MJFLA will not get their money back, but they will have a chance to see it working. Gendelman is developing a plan make it possible for anyone donating money to the organization to track which loans they’ve funded, when the money is paid back and when that money goes out again.
As of this writing, MJFLA is seeking to identify additional founders, donors and others who may want to volunteer their time and talents.
“There are plenty of volunteer opportunities,” Gendelman said. “With a staff of two, it will take a lot more than that to make this happen.”
For more information about the MJFLA, call 414-961-1500.
Amy Waldman is a Milwaukee-based freelance writer.