Prosperity Indiana is the Indiana statewide coordinator for the Community Loan Center (CLC), an affordable small-dollar loan program that serves as a payday-lending alternative. The CLC program allows local lenders to make online loans directly to employees of participating employers. Borrowers apply for a CLC loan online, the loan is deposited in the borrower's bank account, and borrowers then repay their loans each payday through payroll deduction.
Each local lender raises their own loan capital, earns the interest and fee income, and pays fees to cover use of the program software, loan servicing, and collections of delinquent loans. As statewide coordinator, Prosperity Indiana is responsible for recruiting local lenders, helping engage employers, raising additional capital for lending by local CLCs, and providing capacity building to mission-based CLC lenders. Twenty-three counties in Indiana are currently served by an Indiana-based CLC lender.
While payday loans are designed to trap individuals in the cycle of debt, this employer-based model meets the same short-term lending needs without applying the burdensome fees and interest associated with predatory loans. CLC loan features include:
Benefits to Employers:
Benefits to Employees: