A group of bankers hopes to double its community development lending in San Diego County during the next 12 months.

As of June, the Bankers Small Business Community Development Corporation of San Diego had made 10 loans totaling $311,000 to businesses owned by women or minorities.

The for-profit group is made up of 27 banks and one thrift. Currently, the corporation has commitments for $775,000 in 1993-1994 lending.

Need as |Great as Anticipated'

"We have learned that the need for microloans to minority- and women-owned businesses is as great as anticipated," said Jeffrey A. Stone, the group's president. "We are trying to develop them into bankable clients."

Most of the member banks, which earn Community Reinvestment Act credits for their contributions, have assets below $1 billion.

Mr. Stone, also general auditor for San Diego Trust and Savings, says the group was set up as a for-profit "to attract more banks and to prove that this isn't a CRA giveaway. The main thing we gave up by incorporating as a for-profit is the ability to attract foundation grants."

No Collateral Required

Loans issued by the group range from $5,000 to $50,000. They require no collateral, but run just three years, with payments calculated as though the loans were for five years.

Mr. Stone, who was his bank's urban lending officer and has been active in community groups, said the repayment approach builds credit borrowers will need to obtain larger loans.

Although the lending is being done in a high-risk area, corporation leaders say the eligibility requirements -- at least one year in business and six months of profitability -- increase lenders' chances of making a profit.

"It is a CRA program, but it is a program that will have some return on investment," said corporation loan officer Jeni Burgess.

Eligible Borrowers Scarce

Since the program does not loan money to start-up companies, only a few businesses owned by women and minorities qualify.

Lee Fenn, a loan officer with the Small Business Finance Corp., the San Diego community development corporation with which the loan program collaborates, said that only 50% of the businesses his organization helps could qualify for loans from the bankers' group.

However, Mr. Fenn is pleased the loans have yielded 73 new jobs while establishing larger credits in overlooked areas.

"They're basically character loans -- the loans banks did 20 years ago," he said. "These are the types of loans that are needed to really help these kinds of small businesses get off the ground. The difficult part for us is to get the word out." Mr. Schoenke writes for the Medill News Service.

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