Photo: Sigmund | Unsplash
Wanting to test if no-interest micro loans could reduce homelessness, Adam Miller, a West Los Angeles software entrepreneur, put $1 million into a philanthropic enterprise, the Short-Term Eviction Prevention Fund. The project gives interest-free loans to residents of Los Angeles County who recently experienced financial shock and are facing imminent eviction. The repayment for qualified applicants is flexible and the software accepts any payment, as the intention is to form the habit of repaying. If the qualified applicants fail to pay within three years they will be forgiven. Initially, there was a hope of a repayment rate of 70%, but so far it has not turned out that high; however, Staci Miller, the wife of Adam Miller and the chief executive, does not believe the percentage to be representative because the rate has been improving as they learn from experience. One of the major challenges is the requirement of applicants having enough income to pay back, which leaves many ineligible as “the goal of the program is to recover the money so it can be lent again”. Rickey Robinson, their one employee, said, "We don't want to put anyone in debt. That has been kind of the struggle." At Notre Dame University, a poverty researcher is evaluating the data from the applicants and their payment histories to see the effectiveness of these loans. "If this could really help people from becoming homeless, that is much more cost effective than trying to remediate somebody who has become unhoused," Miller said. Even though the city and county have succeeded in moving tens of thousands of people over the past five years, the need has never been clearer as the number of new people on the streets keeps climbing. The Millers hope their experiment will assist government and large nonprofit organizations to design prevention programs, but they will wait until the results of the Notre Dame study are available before making any recommendations.
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