CAMEO, as the effective small business CDFI coalition for California, supports the growth and sustainability of microlending by expanding resources and helping to decrease the cost of providing services. We decided to offer Accion Texas’ Microloan Management System (MMS) platform to members as a way to lower costs of microloans.
LiftFund’s MMS streamlines the cost of underwriting and frees lenders to focus on recruitment and support. The loan turnaround is much faster. The MMS automated review system allows instant feedback on borrower capacity and history, and underwriting takes three days instead of three weeks.
CAMEO believes that our member CDFIs will benefit in the following ways:
- Improved loan quality through a standardized process that strengthens the lenders’ portfolio
- CDFI’s can focus on spheres of excellence (e.g., business assistance)
- Cost of screening, assessment and underwriting per loan decreases dramatically
- Lender volume expands by 70-300% and thus increases revenues
- Staff can concentrate on loan/deal development
For this project, CAMEO has bundled smaller lenders together in one license, allowing them to post a limited number of applications for a reduced price. As they scale, they graduate to a full license. CAMEO guides lenders through a complicated, multi-agency on-boarding process, then provides ongoing support (e.g., staff training, peer network calls, one-on-one, technology assistance). We are working with four members for the pilot: CDC Small Business Development, Opening Doors, TMC Development Working Solutions and Women’s Economic Ventures. Three more are onboarding in 2015: Mendocino EDC, MEDA and Fresno CDFI.
To learn more about how MMS can help make you more competitive with new online players, contact Susan Brown!
CAMEO thanks Rabobank for understanding that microlenders face challenges and competition from new industry players. Rabobank supported us in the rollout of our MMS program.