DETROIT FINANCIAL WELL-BEING INNOVATION CHALLENGE

Pilot Stage Grant Recipient: Credit Escalator

Greenpath Innovation and Design received a $160,000 Pilot Stage grant in July 2023

Lead Organization: GreenPath Innovation and Design
Collaborator(s): GreenPath Financial Wellness; Michigan First Credit Union
Contact Name: Omari Hall
Focus Area: Financial product – debt reduction

Credit Escalator™ is designed to address old debts that are weighing down Detroiters’ credit scores and restricting their access to affordable credit. This new service will combine financial coaching and a personal loan to pay charged-off debt, payday loans, even medical bills, with no credit score minimum required. Credit Escalator’s overarching goal is to systematically change the banking systems for communities of color with an intentionally designed service, starting in Detroit.

Highlights

$180,000

Awarded by the challenge since 2022

200

Black and Brown Detroiters to receive a loan

More than 80%

Of clients targeted to experience an increase in their credit score

Pilot Stage Objectives

Over the course of the Pilot Stage, GreenPath will provide the Credit Escalator™ service to 200 Black and Brown Detroiters. Michigan First Credit Union will serve as a financial services partner during the pilot and provide the loan and line of credit products for Credit Escalator™ clients. With support from GreenPath and Michigan First, clients will:

  • Receive a low-interest, low-payment line of credit (with no credit score minimum required).
  • Develop a budgeted repayment plan with guidance from a financial coach.
  • Work with a financial coach to set financial goals and implement positive financial habits.

Research Questions & Evaluation

As part of their Pilot Stage grant, the Credit Escalator project is participating in a third-party evaluation conducted by University of Michigan’s Poverty Solutions. This evaluation process is designed to help project leaders measure the success of their pilot, consider learnings from the implementation process and apply those learnings to their plans for growth. Among several questions to be explored during the Pilot Stage are:

  • What proportion of interested potential clients succeed through the various steps of the Credit Escalator process?
  • Does the Credit Escalator process and loan product lead to meaningful improvements in clients’ financial well-being? If so, for whom?
  • Does the Credit Escalator program contribute to making the banking system more accessible to communities of color?
  • What changes will be necessary to operate Credit Escalator at a larger scale?

Findings will be shared at the end of the Pilot Stage (September 2024). Come back soon to read about early learnings from implementation

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