Non-profit Banking and The Five Cs of Credit

Non-profit Banking and The Five Cs of Credit

On Friday, the 9^th of December, Kat Taylor came to speak to our 5^th grade class. She is a former parent at our school who co-founded One PacificCoast Bank with her husband, Tom Steyer. It is a non-profit bank in Oakland with the goal of providing helpful fair banking services to less fortunate communities.  She spoke to us why it is important to give loans to people who would normally not be able to get them.

She also taught us the 5 C’s of Credit (the elements a borrower should have to receive credit)

1.      Capacity (the ability to pay the loan back)
2.      Capital (available money)
3.      Collateral (valuable things the bank can own until the money is paid back)
4.      Conditions (of the borrower and the environment the borrower lives in)
5.      Character (the quality of the person). Middle and high-income people are lucky because banks are kinder to them.

There is also a sixth C which she added after the suggestion of an MCDS fifth grader a few years ago: Community (it is important to have a supportive community)

One PacificCoast Bank treats everyone the same, no matter their income. 

By Ben Buder

Pennies A Day: A film about Muhammad Yunus

We watched a video called Pennies A Day about the Grameen bank started by Muhammad Yunus. Before the Grameen Bank, Bangladesh was a country in great poverty. Nobody was making money. Banks did not want to loan to poor people in Bangladesh because they did not think they would pay it back. Then Muhammad Yunus came up with the idea that he would start a bank where they would lend out money to poor rural people around Bangladesh. The business of the Grameen Bank is micro-credit which involves giving small loans to poor people so they have the opportunity to create small businesses. Loans are made for livestock, crafts and agriculture. Ninety-six percent of the loans are given to women because woman with the loans are cautious with the money and spend it first on their children. Each week the people who receive the loans gather in a large circle to make their payments.  The Grameen bank operates in almost every village in Bangladesh. The pay back rate is 99%. Now Bangladesh has roads and there are lots of small businesses.


By Anna Weisel