Lending Circles – Loans with Zero-Interest

Lending Circles – Loans with Zero-Interest

Lending Circles – Loans with Zero Interest – Now Report to Credit Bureaus

To understand this week’s technology, I need to explain the concept of a Lending Circle. It’s a loan between six to twelve people who get together to lend money to each other at zero-interest. Lending Circles are informal arrangements of people pooling their resources and distributing small loans to each other typically in the $500 to $1,000 range. It’s actually a traditional cultural practice from Latin America.

The circle decides on the loan amount. For example, a group of 10 people might decide they each want a loan of $500. Everyone in the Lending Circle makes the same monthly payment, ranging from $50 to $200. One person at a time is the recipient of the $500 until all members receive the loan. These informal groups are used by folks who need a loan but don’t have access to banks or any other financial institutions as they don’t have any credit history.

A very bright man by the name of Jose A. Quinonez  is helping individuals overcome this challenge by linking lending circles to the  “formal financial” sector.  Quinonez founded  the “Mission Asset Fund” (MAF) and created a mechanism for reporting individual’s repayment history to the lending circle to credit bureaus and other financial institutions. The Mission Asset Fund is a God send for a reported 16 million people who don’t have access to a bank and 45 million people who don’t have credit history. These are millions of people who live in financial obscurity unable to participate in 21st century financial opportunities. 

The website, MissionAssetFund.org, states “when hard working families can’t get car loans or own homes, they turn to payday lenders and check cashers to make ends meet. High-cost fringe financial services trap people in a cycle of debt, preventing hardworking families from unlocking their full economic potential”.


Quninonez was recognized in 2016  with a “Genius” award and grant by the prestigious MacArthur Foundation.