In the vast landscape of financial services, the barriers faced by individuals with low incomes and poor credit histories are often insurmountable. Traditional lending institutions rely heavily on credit scores, which can disadvantage those historically marginalized or who have fallen victim to financial setbacks. This systemic issue has contributed to the perpetuation of poverty, especially among minority communities. However, a groundbreaking organization named JUST is rewriting the rules of lending to address these credit barriers, offering a unique approach that makes a tangible difference in the lives of many.

The Traditional Lending Dilemma

For individuals like Leti, a Hispanic woman who experienced a profound personal loss, the conventional financial system can seem both impersonal and inaccessible. After the tragic loss of her child, Leti’s food truck business, once her lifeline, collapsed. As her financial situation worsened, she struggled to secure traditional loans and lacked savings to fall back on. With her prospects dwindling, Leti began cleaning homes to make ends meet.

A New Hope: JUST

Leti’s fortunes took a turn when she discovered JUST, a nonprofit organization dedicated to supporting Hispanic and Black female entrepreneurs. Founded to provide financial assistance without relying on traditional credit scores, JUST operates on a trust and community support model. Its approach has proven effective: it has disbursed more than $21 million in loans with a remarkable 99% repayment rate.

Steve Wanta, CEO and co-founder of JUST, explains that their method represents a departure from the conventional financial system’s reliance on credit scores. “Our financial system in the United States is not designed to trust people, especially those without money,” Wanta asserts. “Credit scores don’t paint an accurate picture of capability for thousands of people who have, in some cases, been penalized by the system or can’t get a foothold in the first place. Building up a longstanding credit history is impossible without that initial foothold.”

Breaking down Credit Barriers

JUST’s innovative model involves assessing individuals based on their potential and character rather than their financial history. When Leti applied for a loan through JUST, the organization met her with an empathetic and supportive process. No one asked for her credit score or scrutinized the failure of her previous venture. Instead, it gave her a $750 loan based on trust and belief in her potential to succeed.

Leti’s experience with JUST showcases the effectiveness of its approach. Before receiving a loan, she cleaned four houses a week, barely making ends meet. After joining the JUST community, she secured the funding to revitalize her business. With support from JUST’s peer coaches and a network of women entrepreneurs who had overcome similar challenges, her cleaning business flourished. What started as a one-person operation has become a successful enterprise, now employing more than 30 people.

Final Note

The success of JUST’s model underscores the power of trust in financial transactions. JUST has created a lifeline for those who might otherwise be excluded from the financial system by offering loans based on character and potential rather than credit scores. This approach supports individual entrepreneurs and fosters community development and economic empowerment.

As Leti’s story demonstrates, providing opportunities to those who might be overlooked can lead to remarkable outcomes. With continued support and innovation, JUST is paving the way for a more inclusive and equitable financial landscape, proving that trust and community can be powerful tools in the fight against poverty.

– Sakshi Bhagat

Sakshi is based in Kolkata, West Bengal, India and focuses on Business and Good News for The Borgen Project.

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