LEO seeking partners to launch new MI Affordable Loan program to close equity gaps for low-income Michiganders

Applicants encouraged to respond to request for proposals to support program management

LANSING, Mich. – The Michigan Department of Labor and Economic Opportunity (LEO) has issued a Request for Proposals, open from March 16 until April 28, to launch the state’s new MI Affordable Loan program to support low-income individuals with obtaining small dollar, short-term loans, while modeling inclusive lending practices and closing equity gaps present for traditional bank loans.

“Strong partnerships are essential to supporting economic growth across the state,” said Susan Corbin, Director of the Michigan Department of Labor and Economic Opportunity. “We’re looking forward to expanding our partnerships to offer financial relief resources so more people in our state have an equal opportunity to succeed and make it in Michigan through the MI Affordable Loan program.”

The Request for Proposals (RFP) is open to organizations that have demonstrated experience and success in providing low-barrier access to loans for those who may not typically engage with financial institutions. Through this pilot program, the grantees will develop a small dollar, short-term loan product that allows customers to take out a loan of up to $1,200, payable in a 12-month period and with an APR of no more than 36%.

Senator Sarah Anthony has been a leading advocate for expanding affordable lending options in Michigan and played a pivotal role in securing funding for this program.

“For many Michigan families, an unexpected expense like a car repair or medical bill can quickly become a financial setback,” said Sarah Anthony (D-Lansing). “Expanding access to these types of small-dollar loans will help ensure the people who need it most have a reliable option and a pathway toward stronger financial stability. I’m proud to partner with the department on this effort and continue my work to strengthen responsible lending reforms in our state.”

The goal of the program is to model the economic viability of a lending product that isn’t financially exploitative for people with adverse credit histories. This program will support LEO’s strategic goal of promoting inclusion and closing equity gaps by providing reasonable loan rates to those who may not otherwise qualify for traditional bank loans and assist those who do not have or utilize an existing bank account to build credit.

“The loan program will provide much-needed support to the low-income individuals the grantees serve,” Kim Trent, LEO’s Deputy Director for Prosperity and key staffer for the Poverty Task Force. “LEO will prioritize partnerships with organizations who have a history of success providing a full spectrum of services that meet the financial needs of low-income individuals and support the mission of the Poverty Task Force.”

Applicants must have a strong understanding of the barriers and factors that affect this population’s ability to obtain loans. The organization must possess the capacity to carry out their responsibilities to coordinate and perform administrative activities, communicate goals and ensure an innovative approach to improving financial stability for the target population. Throughout the duration of the grant, the organization will work closely with LEO, as all final decisions about the program’s strategic direction and vision will be made by the LEO grant administrator.

An informational webinar on the grant and the application portal, EGrAMS, will be held on March 23 at 1 p.m. EDT. To learn more about the RFP and how to join the webinar, visit the MI Affordable Loan webpage.

Questions about the MI Affordable Loam program may be sent to LEO-PovertyTaskForce@michigan.gov.