By Andy Douglas
I’ve been helping to start a new Prout-inspired project in my hometown of Iowa City, Iowa, in the US. By sharing about it, I hope to demonstrate that many opportunities exist for implementing Prout in practical ways around each of us.
This project began with the understanding that American society has an extremely skewed distribution of wealth, that a minority of people hold the majority of assets. Even in the middle class, access to wealth and ways of building wealth have been restricted, and often limited to certain populations. Wall Street and big banks exercise control and monopolization of capital. This creates a mindset in which profit comes first – an extractive, consumerist mindset.
Many people face difficulties in raising capital to start small businesses. Perhaps their credit doesn’t allow them to get a loan from a traditional lender. Or perhaps their history has not allowed them to build up equity. There are also historical, institutional blocks for many people trying to build their wealth. For example, African-Americans have often been discriminated against by banks when applying for loans.
I also saw that people with limited means often turned to predatory ‘payday’ lenders when they had an emergency expense come up. These lenders fronted the necessary cash, but they also charged an outrageous 30% or more interest. This would lead to people getting mired in a debt cycle.
I envisioned developing a local microlending initiative. Microlending, microcredit, or microfinance are growing phenomena. They offer financing for small projects. When the loans are repaid, the money can be lent again to other borrowers, and other projects. Ideally, it is a communal project, with borrowers encouraging each other in their projects and in their repayment.
One of the first and most famous microlenders was the Grameen Bank, a very successful microlender originating in Bangladesh. The payback rate of loans to poor people there was almost perfect. Another is Kiva, an online lending platform which allows lenders to support projects all over the world. When the loans are repaid, the lender can choose to lend the money to another project.
Prout is about building a society in which wealth is shared. Its vision of small-scale private businesses is part of a three-tier economic structure. In addition to small businesses, Prout envisions a cooperatively structured middle tier, and large industries serving essential needs, like energy or telecommunications, run as public utilities.
Proutists believe in a more balanced economy, where everyone can contribute and flourish. We’d like to see less corporate control, and more employee-owned businesses and cooperatives, motivated by a sense of community spirit, not just profit.
After ascertaining the need for more financing for low-income entrepreneurs, especially people of color, our small team began doing the legwork to create a microlending initiative. We named the project ELLI, for Equitable Local (micro)Lending Initiative. We recruited ethical lenders, and found an administrative home in the local Unitarian Universalist Society. The real breakthrough came when we encountered and developed a partnership with a nonprofit agency that was already doing some similar work, promoting entrepreneurship among low-income populations here. It’s called the Multicultural Development Center of Iowa and has experience in administering microloans, as well as the software and staff to follow up on loan repayment.
In addition to offering loans for business development, we will also be offering emergency loans, in order to provide an alternative to the predatory payday lending industry. The values that guide our work include equity, justice, community, generosity, ecology and being people-centered. These are Neohumanist values as well as UU values.
The local angle is important. By investing in local businesses, wealth remains in the community. This creates a multiplier effect, increasing the impact of investment. It strengthens community bonds, and empowers local neighborhoods. We’re just getting started, but the prospects look exciting.
Check out our Facebook page at
https://www.facebook.com/profile.php?id=61559943549719
A similar PROUT inspired project ran from 1997 to 2022 in Nelson NZ. Called the Nelson Enterprise Loan Trust, it made 298 loans averaging $8500. See https://www.stuff.co.nz/nelson-mail/news/130698646/trust-that-supported-small-nelson-businesses-winds-up-after-24-years