Ypsi-based app aims to tackle predatory lending by facilitating peer-to-peer microlending
School uniforms, groceries, medicine for grandparents, gas, and dental surgery are just a few of the things Washtenaw County residents are getting loans for through a new peer-to-peer microloan platform. to-peer called HelpCountry.
“We’ve had everything from students needing money for books, to people having car trouble, to single parents needing money for school supplies for their kids,” says the co-founder of the application, Emmanuel Aubrey, based in Ypsilanti. “A lot of Americans don’t have enough money set aside for an emergency over $1,000. HelpPays is one way to meet a need we’re seeing not just in Washtenaw, but nationwide. .”
HelpPays’ slogan is “Anyone can lend to anyone.” The idea is to open financial access to people who cannot obtain credit through traditional means or who wish to obtain credit at a lower rate. HelpPay lenders and borrowers communicate with each other to determine the terms that work best for them. Borrowers set their own rates, which the app caps at a simple interest rate of 30%.
“In contrast, the overall experience of most lenders is generally one of exploitation. And, depending on who you see it, it can be sort of a very aggressive form of lending,” Aubrey says. “So not only are the interest rates predatory, but some of the practices can include people coming to your house and haranguing you if you’ve missed a payment.”
He explains that using simple interest versus APR helps to simplify everything for users. Since HelpPays borrowers will only ever owe the agreed interest, there is less anxiety about taking on more debt if they are unable to pay. Lenders are also protected as they are assured of a fixed amount of money. HelpPays does not use a collection agency, but rather offers lenders greater peace of mind with an option to write off a loan loss as a tax-deductible donation.
Since the app launched last month, around 50 loans have been granted. Many were funded within hours of borrower requests, but most were funded within one to two days. Aubrey reports that several borrowers have even repaid their lenders in full. He also says almost all borrowers reached out to thank HelpPay and their lender for helping them through their troubling financial crisis.
“It’s been rewarding because our long-term goal is to ensure that people who are borrowing now can not only access the credit resources they need now,” he says. “We want the people of Washtenaw to build relationships, network and help each other towards financial mobility.”
Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at [email protected].
Photo courtesy of Emmanuel Aubrey.