Financial Capabilities in Action: A Case Study of a Community-Facilitated Loan Program

Background and Objectives: About 34% of Athens, Georgia residents live below the poverty line, with 37% lacking significant access to mainstream banking products, and only 50% having emergency savings. Lenders such as auto title loans, which charge high-interest rates than formal financial institutions, worsen financial challenges in the region. Nonprofit organizations like the Ark have responded to these challenges. Established in 1989, The Ark initially provided rent and utility assistance and later implemented a community-based financial education and credit-building program, which combined individual financial counseling and loan refinancing, known as CommonWealth Athens (CWA) for financially vulnerable families. CWA combines financial education classes, one-on-one financial counseling, and refinancing predatory loans to low-interest loans provided by Georgia United Credit Union (GUCU). In the current study, we report the findings from a mixed-method case study which aimed at examining the ex-post facto effects of CWA on vulnerable families, including the factors contributing to success within the program.

Methods: Data for this study were collected through interviews with program participants [particularly women] and staff, document review, and non-participant observation. Interviews were conducted using a semi-structured guide, and data were analyzed using NVivo. We utilized an adapted version of the W.K. Kellogg Foundation logic model development guide to inform data collection.

Results: Among 55 participants in the CWA’s program, a majority being female (69%) and African American (83.6%). Most participants had a high school diploma (41.8%) and faced significant challenges such as disabilities (34%) or homelessness (12.7%). Only a few received TANF (12.7%) or housing benefits (21.8%), however about half of the participants reported receiving Food Stamps/SNAP (49.1%), and administrative records show that nearly all participants were low-income. Quantitative findings indicated post-program improvements, with 76.4% reporting better understanding of credit scores and 58.2% noting increased awareness of predatory lending. Financial well-being scores significantly improved, and average credit scores rose from 534.20 to 579.21. Qualitative findings revealed participants’ experiences of financial hardship, coping mechanisms, and encounters with racism, demonstrating program’s role in addressing crises and systemic barriers faced, particularly by marginalized communities. CWA’s supportive staff and personalized approach were also found to empower program participants to manage debts, improve credit, and develop savings habits, ultimately contributing to long-term financial stability and improvement in self-efficacy and family relationships.

Discussion and Implications: The study highlights the efficacy of integrating financial education with financial inclusion initiatives to address the financial challenges faced by low-income families, particularly women. Findings reveal the lived experiences of participants, their coping strategies, and changes in their financial behaviors and attitudes after participating in the program. Our study also revealed a model for trust-building relationships among program staff, participants, and financial institutions in facilitating access to financial services and resources. These findings have implications for social work practice as there is a substantial need for tailored financial interventions that address the unique needs and circumstances of marginalized populations, particularly in the context of systemic barriers such as racism and financial exclusion.