Pear Man Loans Open Ag Niche for Credit Union MBLs

On Seattle’s South Side is a credit union serving people with limited means. Express Credit Union, originally a railway credit union serving union members, is open to anyone living or working in Washington. About 20 years ago, this very urban financial institution was in a position to help a member start what would turn into a million-dollar business with just a $2,500 loan.

This man, now known only as “The Pear Man,” planted a few pear trees and became an orchardist. Over time, his business grew significantly, and today he owns thousands of trees across the state. And it all started with a hand up from a small, urban credit union.

Each year The Pear Man still delivers a box of fruit to a smiling group of employees in the small Express Credit Union lobby, saying nary a word.

“We call them Pear Man loans because it reminds us why we issue them,” said Express Advantage CEO Sharon Hall. “With a hand up, credit union members can make their dreams come true no matter how unusual their idea might be.”

A regional success story, Hall said Express has issued many Pear Man loans over the years, including operation loans to a group of African immigrants working land in the Auburn valley, but that it’s a complicated process that also requires a member have experience and operational support. Because of this, Express handed the lending program over to another credit union, North Coast Credit Union in Bellingham, Wash.

Working in conjunction with a local agriculture non-profit Viva Farms, North Coast Credit Union is helping taking the idea behind Pear Man Loans to the next level.

There is a simple truth in ag lending, according to North Coast Credit Union President Terry Belcoe: “New farmers working small plots cannot get loans.”

Belcoe said that Viva Farms is specializes in slow foods and what they’re doing is a social based effort that enables new farmers to get started. What they are finding, according to Belcoe, is an incredible open space for his credit union’s services and social agenda

“Today in Skagit County we are seeing first- and second-generation Americans who have been in agriculture all their lives populate an area that is historically a culturally rich area with fertile soil, but whose traditional residents are leaving the farm,” he said. “By working with these new Americans, they are helping to keep the heritage of the area alive and well . . . the only thing is that these new Americans need to learn how to run a financially successful farm.”

That’s where North Coast’s partnership with a local non-profit called Viva comes in.

Viva is the convergence of GrowFood, an international network with the mission of training the next generation of farmers through internships, apprenticeships and mentor matchups, and the Washington State University (WSU) Latino Farming program. Known as a “farm incubator,” its mission is to help farm workers, interns and market gardeners make the transition to farm ownership.

“The win-win opportunity here is enormous,” Belcoe said. “Each participant attends a 12-week farm business course, rents a parcel of land at the Viva farm.”

The stipulation: Each farmer needs to follow organic methods and maintain records for their parcel, but they can grow whatever they like. And Viva Farms provides field-based education, support, equipment, distribution and marketing assistance, in addition to the shared greenhouse and processing facility.

North Coast Credit Union is part of the operation’s network of social investors, setting up a loan fund so new farmers can purchase their own land and equipment.

Through its partnerships Viva can secure loans through the credit union up to $5,000, which means much of the risk is taken out of the credit union’s lending. The credit union, though, has the option of also matching the unsecured loan up to $5,000. This gives the new farmer $10,000 to work with, in addition to technical support from Viva.

Belcoe said that in 2012, North Coast will test run the program with a total of 10 loans to test the loss experience.

“If it works the way we figure it will, we’ll find a way to expand this ag-business program.”


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Posted in Around the NW.