Nonprofit to Launch Incubator for Payday Loan Alternatives

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Filene Research Institute is readying an incubator to develop products aimed at low-and-moderate-income consumers.

The nonprofit think tank for credit union-related issues will choose 25 credit unions and five products to participate in an 18-month program that starts in November.

The incubator, which will operate out of Madison, Wis., will include three phases: testing product ideas, manufacturing and packaging products for mass adoption, and distributing products. The program's end goal is to implement and commercialize at least one of the products tested in the incubator among large financial institutions.

Filene received a $700,000, 30-month grant from Ford Foundation to fund the incubator.

"The Ford Foundation's support enables us to build an accessible financial services incubator that provides alternatives to payday lenders and other predatory providers in America's low-and-moderate-income communities," said Mark Meyer, chief executive, in a press release. "The incubator will contribute significantly to creating a vibrant financial marketplace that offers products beneficial for underbanked consumers and mainstream financial institutions."

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Comments (2)
Why do this? It's already done and solved!
Posted by kerridgeinternational | Thursday, September 26 2013 at 6:15PM ET
Rather than spending the next couple of years "reinventing the wheel," Filene might want to consider at least talking to some of the leading non-bank, small-dollar lending firms. At this week's Small-Dollar Credit Symposium, attendees learned that many of these firms have already expanded into different types installment lending and away from classic 2-week payday loans.
Posted by jim_wells | Friday, September 27 2013 at 10:32AM ET
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