Mohammed Ullah Loan Fund
UPDATE February 20, 2010
Mohammed made his first $150 loan payment on time on Monday, February 15th. The first three funders have been contacted and will be getting their money back. We shot some video of him making his first payment here at the office, but haven’t had time to edit it. So much to do!
UPDATE February 3, 2010
Mohammed and Shamsun (and their beautiful family) hosted some loan fund supporters for dinner at their apartment in Brooklyn on Monday. Dinner was delicious, and everyone had a nice time. And now we know where to collect if Mohammed doesn’t pay! (just kidding, we think he’s going to pay). Here’s a photo.
UPDATE January 14, 2010
After almost cancelling the loan fund, we got a couple checks in and disbursed Mohammed a loan for $1,700, which combined with some other money he has will be enough to pay his fines and renew his license. Watch this video.
1) Who is Mohammed Ullah?
He is a member of the Street Vendor Project who sells roasted peanuts on 50th Street and 7th Avenue. He is originally from Bangladesh.
About two years ago, he received two vending tickets, for which he now owes $2,000 to New York City. If he doesn´t pay, the city will not let him renew his vending license when it expires on January 31st. Here is a copy of one ticket, which he received after he went to use the bathroom and left his license with his wife, who was watching his cart. The Health Department charged him with ¨transferring¨ the license to his wife.
Here´s some pictures of him at his vending cart. You can go by and see him any day. His English is not great, but he´s a very nice guy.
2) Why is the Street Vendor Project raising money for him?
He´s one of our members, and he needs $2,000 to keep his license after it expires at the end of January. Without it, he cannot work.
While we are not a microfinance organization, we´ve been inspired by peer-to-peer lending sites like Kiva, which have revolutionized how money is lent to small business owners around the world. However, we´ve found that these sites don´t work for our members, who usually have no credit or bad credit (see below). So, we´re trying it on our own.
If this works, we´ll look into expanding the idea. Many of our members need loans, and we believe that many of our supporters can afford to give them small loans and will do so if SVP facilitates it.
3) Is SVP going to take any administrative fees out of this?
No. 100% of your loan will be given to Mohammed, for the sole purpose of paying his outstanding bill and renewing his license.
4) Is he going to pay the money back?
We think and hope he will, but obviously we can´t be sure. You should not loan Mohammed money if you cannot afford to lose it.
5) Does he have bad credit?
Not really. Apart from a cell phone bill he didn´t pay a few years ago, he actually has no credit, because he´s never had credit cards, a house loan, or other things that would allow him to build a good credit score. This is quite common among our members.
6) Why don´t you send him to a microfinance organization?
We did, but it didn´t work. For banks and microfinance organizations, no credit usually means bad credit. We tried to post his profile on Kiva and a similar site called Prosper.com, but those didn´t work for the similar reasons.
7) Why doesn´t the Street Vendor Project give him a loan directly?
We don´t have a line in our budget for that. But also, it would be a bad idea for SVP, or any individual or organization to take the full risk of Mohammed not paying back the loan. That is why we are asking that each person limit their Mohammed loan amounts to $100.
8. What happens if you don´t raise the full $2,000?
If we get close, we´ll see if Mohammed can raise the remainder from his friends of family. But if we can´t raise at least a $1,500 from our supporters, we will refund all the money right away.
9) Will I earn interest?
No. Mohammed is willing to pay interest, but it would be hard for us to administer, and the interest on these small loans will only add up to a few bucks anyway.
10) How will I know how Mohammed is doing throughout the year?
We´ll post updates!
11) When will I get the money back?
As Mohammed repays the money, we will send you a check for the amount you loaned him. We´ll do this on a first-lent, first-paid-back basis. The earliest you would get your money back would be late February, 2010. The latest would be late February, 2011.
12) Is my loan tax-deductible?
No, since you are not making a donation, but a loan, you cannot deduct it from your taxes.
13) I have other questions. What should I do?
Send them to svp [at] urbanjustice.org
14) Ok, I´m ready to do this. How do I contribute to Mohammed´s loan fund?
Just go to our regular donation page here and write “Mohammed Loan Fund” in the box to designate a specific program or fund. If you don´t write anything in that box, we´ll assume you are making a general contribution to support our work (in which case it will be tax-deductible).