- Some black residents of Little Rock, Arkansas, were having trouble borrowing money from traditional banks.
- Local barber shop Arlo Washington has started giving out cash loans to help people pay their rent and bills.
- Washington now operates its own credit union, helping neighbors buy homes and start businesses.
This told essay is based on a conversation with Arlo Washington, 46, a barber from Arkansas. He established a college to train barbers, a loan fund, and a credit union. Washington was featured in the Oscar-nominated short documentary film “little rock barberThe following has been edited for length and clarity.
I'm from central Arkansas, just west of Little Rock. I was born and raised there.
The city is diverse, but also economically segregated. When I was a child, I lived in a low-income housing project area. I remember seeing the disparities in the buildings, the dilapidated buildings and the people struggling. It looked like concentrated poverty.
I wanted the prosperity of the wealthier side of town to extend to areas of economic disparity. I didn't want to see boarded up houses or businesses close.
When I started my career as a barber, I was driven by the change I wanted to see in Little Rock. We wanted to promote equity and create new jobs.
Currently, I am a barber shop owner and founder of Washington Barber College. The university has 50 students and employs 8 barbers.
I also support the People Trust Loan Fund, which provides consumer and small business loans, development services for disadvantaged small businesses and consumer financial literacy, and the People Trust Community Federation, which provides consumer and auto loans. He is also the founder of a credit union. Loans to people who are difficult to qualify for with traditional banks. Community is where we are born.
The credit union offers loans ranging from $500 to $50,000. Because we underwrite high-risk loans and work with people with low credit scores, our interest rates range from 4% to 10%. For small loans, the repayment period ranges from 6 months to 1 year. For a $50,000 loan, the maximum is 72 months. To date, we have processed 6,220 loans for a total of $63,358,627.
The majority of People Trust borrowers are African American.
The loans and grants we provided helped individuals who otherwise could not afford to buy a home buy their first home. Additionally, our clients open many different types of businesses, including food trucks, barber shops, beauty shops, event spaces, and restaurants.
We have focused on being a facilitator and facilitating transactions that reduce poverty and close the gap between rich and poor in Little Rock.
It all started at a barber shop
When I started working, I couldn't get a loan from a traditional financial institution and didn't have a bank account.
I didn't have any credit, and I didn't have a wealthy uncle who could say, “Here's some startup capital.'' We had to get creative and think about where we would get the money to do certain things.
I was enrolled at the University of Arkansas at Little Rock and was undergoing a credit balance check for financial aid student loans. The check was for him exactly $1,732. I remember that amount because I thought, “I've got to do something. I've got to take advantage of this so there's no going back. I've got to move forward.”
I took $500 from the check and deposited it in a rented space at my barber shop. My customers, family, and friends also pitched in to get it up and running.
Within the first year, the store had grown to nine chairs. He then bought another barbershop and used the profits to buy more barbershops that were about to go out of business. I took over about 27 employees.
I wanted my products to be consistent, so I trained barbers and stylists. I have noticed that some of them can go straight across the street and start a business after being trained. I decided that perhaps I should start a school.
The idea was to train and deploy barbers throughout the city so that more economic opportunities could be created.
We currently employ and train barbers at multiple locations to help them become a positive influence and resource. Barbers are pillars of the community and the foundation of brick buildings. We maintain our community, especially during difficult times.
We are a safe haven.
I wanted to help underserved communities.
The People Trust Loan Fund was born out of the unmet credit needs of our communities.
In 2009, Arkansas became a credit desert due to its ban on payday lending. Our legislators have done a great job of eliminating predatory payday loans, but have failed to create a safe alternative. With local residents unable to access small loans, more people turned to family, friends, and loan sharks.
People would come into barbershops and universities and say, “Mr. Washington, can I borrow some money?'' How can you say no when a long-time customer needs support?
In 2013, one of my clients lost his job and needed $150. I lent them money and a few weeks later he came back and paid me. Then his wife also asked for a loan of $150. When the couple returned to pay off her loan, they brought their cousins ​​with them. We just left from there.
The People Trust originally started as a nonprofit social service organization.
We provide bag lunches and assistance for low-income students to return to school. He also picked up homeless people and took them to the barbershop to get haircuts.
There was a homeless man who enrolled at Washington Barber College, and one particularly cold day we found him sleeping under a trailer behind the barber school.
That's why we wanted to do even more to help our community. In 2014, we changed all our organizational structures and became a financial institution by law. Our focus has shifted further to lending and financial literacy. It received CDFI designation in 2016 and received support from the Winthrop Rockefeller Foundation. The Ministry of Finance also supported us with a technical assistance grant.
we give everyone a chance
People Trust Loan Fund is a nonprofit organization run by a 100% African American board of directors and 90% staff. We help people facing eviction quickly rehouse and prevent homelessness.
We also provide emergency subsidies. If they need clothes for a job interview, or have lost their job and are facing eviction, we offer grants to help them regain financial mobility and stay in their homes. can.
The credit union takes a holistic approach, serving community members wherever they are in their financial journey.
We're not going to look at your credit score and say, “No, you've been denied.” Examine your ability to repay your loan and evaluate your cash flow. If you have cash flow, we will arrange a loan that fits your budget.
We offer counseling if you don't see the ability to repay, lack sufficient documentation, have a very low credit score, or have no credit in sight.
It usually looks like this: “Hey, look, I know you want to borrow $3,000, but maybe you should start with a loan in the $500 to $2,500 range and then we'll see what happens.” Once they prove their ability to make these payments, we will consider increasing the loan amount.
A 60-year-old woman had never bought a home and always wanted a home of her own, but was saddled with credit card debt. We provided her with her debt consolidation loan and she has just built her new home.
There were also community members who were denied loans from traditional big banks. She received her 4 installment loans from us throughout the year. Each time, she took out a small loan, paid it back, and took out another small loan. As a result, her credit score increased. Eventually, she was able to obtain a larger loan line from her traditional bank.
Our credit union is a minority depository institution that allows you to open an account and serve members from anywhere in the country.
What we're doing is focusing on areas that don't have bank branches but are densely populated. For example, we are preparing to open additional branches in Little Rock and rural Wrightsville, Arkansas.
I can't believe my novel was nominated for an Oscar.
When my story was featured in The Barber of Little Rock, I knew the directors were great in their profession. But never in a million years did I imagine it would be nominated for an Oscar. I never thought of that, and I don't think the staff did either.
I will be attending this year's Oscar Awards. It feels surreal and wonderful. I'm so excited to share this story with the world. By having many people see it, we had a great effect.
I received a lot of emails from people asking me to come into the community and do the same thing. I also receive consulting offers and lecture requests.
I believe that what I was able to accomplish speaks to my resilience as an entrepreneur. It also reminds us that we can create opportunities no matter where we are.
If you find any issues, please fix them.
