Jose Quiñonez came to the United States in 1980; he was an undocumented 9-year-old immigrant from Mexico. Eighteen years later, Quiñonez graduated from Princeton University with a master’s degree in public affairs.

As executive director of Mission Asset Fund, a fledgling nonprofit organization on South Van Ness Avenue, Quiñonez is working to help low-income recent immigrants achieve their American dream by opening bank accounts, building credit, and saving money for long-term investments.

So far, more than 50 accounts are managed through the fund’s three programs.“The connotation is that low-income immigrants are financially illiterate, but it’s not true,” Quiñonez said. “They’re savvy with their money, but they’re savvy in ways we can’t always see.”

Forty-four percent of Mission District households have no credit history, while 50 percent of Mission Latinos have no bank account, according to a 2008 report completed by Social Compact, a national organization that analyzes local economies.

“That means 44 percent have no access to credit,” Quiñonez said. “They can’t get a loan to buy a car or start a business. They’re shut out, so they fall prey to loan sharks and other high-interest fringe operations.”

In an attempt to reverse this trend, Cestas Populares, the fund’s latest program named after the Spanish word for baskets, helps Mission Latinos establish credit histories or improve credit scores by at least 50 points.

The program is based on a model common in Mexico among savvy but poor Mexicans. To increase their own buying leverage, friends contribute to a communal pot of money. Each month, members deposit a fixed amount and take turns withdrawing the full balance to pay off individual debt or manage household finances. Conducted outside the formal banking system, communal pots function as informal savings or lending programs. Some 30 percent of the Mexican population participates in such cestas, according to Quiñonez.

Along with Bank One California, the Mission Asset Fund has formalized an informal system, allowing Mission immigrants to improve their credit scores stateside. The fund acts as steward of the communal pot, subsidizing bank administration fees and guaranteeing member deposits.

So far, the new program has had modest success. Two pilot groups are now in the works: a group of four family members is in its third month, paying in $50 a month each; and a group of nine women is in its second, paying $100 a month each.

Half the women in the second group had participated in Mexico’s informal cestas, and a few even lived in the U.S. without a bank account, according to Quiñonez.

Through Cestas Populares, members open personal bank accounts to participate in the Cestas program. By making monthly deposits into a joint account, each member builds credit.

Hairstylist Martha Ramos, 34, recently joined the Cestas program to improve her credit. Though Ramos has only been in the program two months, she is on the path to savings, she said. By altering her spending habits and achieving lower interest rates, Ramos hopes to save money for a family vacation, and eventually open her own business.

“I’m frustrated by my bad credit,” said Ramos, a mother of two. “I used to use [high-interest] credit cards for everything, and send in the minimum payment every month. For the first time in my life, I feel like I can get the things I need, and I can pay for them.”

“Because of the economy and the financial credit crunch, people are more sensitive to the need of improving their credit scores,” said Quiñonez. “People need access to capital, and banks are becoming more leery of people who have bad credit, or no credit history.”

Those with bad credit or without a credit history who cannot afford a pay for delete letter find themselves paying more for financial services.

Check cashers and payday lenders abound in the Mission at about twice the rate of banks, according to the Social Compact report. They typically charge 4 to 5 percent to cash a check, and significantly higher rates on loans.

“When you don’t have credit, everything is more expensive,” said Anamaria Loya, executive director of La Raza Centro Legal and board president of the fund. “And they’re living the way almost no one in this country lives, only eating when there’s money in their pocket.”

And if there’s no money in their pocket? Loans from high-interest fringe operations lend money at much higher interest rates than banks, and require faster repayment.

There are other ways low-income immigrants live more expensively without access to low-interest credit, Loya said. For example, a group of day laborers might pool their money to rent a week in an SRO, and acronym for single room occupancy, paying more than they would for a month’s rent elsewhere.

Immigrants without bank accounts can become magnets for crime, according to Loya. “There’s a horrible trend of calling day laborers ATM machines, because they have their money on them,” Loya said. “They’re targeted for robbery.”

Quiñonez has high hopes for Cestas Populares. By the end of this year, the fund aims to recruit 10 groups. Success will be tracked by improved credit scores, and dollars saved through lower interest rates. The fund will then market the program as a model for nonprofits to replicate nationwide.

“Eventually they’ll have access to lower credit,” Quiñonez projected. “Instead of paying 9 percent on a credit card, they’ll pay 7.”

Cestas Populares is one of three main programs offered by Mission Asset Fund. Their Individual Development Accounts match immigrant member savings dollar per dollar, and Tarjetas Populares endow day laborers and bankless immigrants with a safe, reliable debit account and Mastercard. Financial coaching and education are provided for all fund clients.

The year-old fund was founded thanks to a $1 million grant from the Levi Strauss Company. After its Valencia Street factory sold in 2005, the company pledged to give a portion of the proceeds back to the community. After two years of deliberation with local leaders, Mission Asset Fund emerged.

The fund is one of more than 50 nonprofits based in the Mission. Others, like Mission Economic Development Agency, counsel locals in anti-predatory lending.

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