A growing movement sees community foundations invest in local financial institutions and development projects, empowering entrepreneurship in the underserved communities that need it most.

By Oscar Perry Abello.

On an average day at Self-Help Federal Credit Union’s branch in Fresno, Calif., ten or so people come in to sign up as new members, and around 20 people submit applications for home mortgages, car loans, small business loans or personal emergency loans (for as little as $500). Since opening in August 2015, this one branch has made more than 1,000 loans and counting. But these aren’t just any borrowers. At this branch, 70 percent of borrowers come from low-income households, and 91 percent are people of color.

Branch Manager Rosa Pereirra has witnessed those borrowers reclaim power over their financial lives in ways that still surprise her, even after 28 years in banking.

“Some of the folks coming in making $12.50 an hour, they’ve got $15,000 in their savings account,” says Pereirra. “I make a good living, but I don’t have $15,000 in my savings account.”

These borrowers and this branch are the exceptions and not, unfortunately, the rule. In the state of California alone, payday lenders make billions of dollars in payday loans per year, earning hundreds of millions in interest and fees — all largely targeted at low-income households and communities of color.

California-licensed payday lenders earned $458.5 million in fees on payday loans in 2016, according to the latest annual report from the state’s Department of Business Oversight. Nearly 75 percent of those earnings, $343 million, came from customers who took out seven or more payday loans. Some 77 percent of payday loan borrowers in California earn less than $40,000 a year — and payday lenders are more likely to set up shop in predominantly black or Latino neighborhoods, according to a separate study from the same department.

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Read the full story at Next City.