In the first eight months of the MMS pilot, the program has received 160 loan applications, rejected 107 and approved 32 for an approval rate of 20%. The program has lent $656,000; we hope to reach $1 million in the first year.
Susan Brown, the program manager, spoke with Devon Johnson of Women’s Economic Ventures about her experience.
Devon has been, until very recently, WEV’s one-person microlending shop serving Santa Barbara and Ventura Counties. For the past couple of years Devon has closed about 20 micro deals per year, lending about $300,000 for an average loan size of $15,000. That was the limit of what she could handle on her own.
When the opportunity to try Accion Texas’ MMS program came along, she was open to the possibilities of expanding volume – almost like hiring another person for a fraction of the cost.
And that’s turned out to be true.
Because MMS’ Auto Review gives instant feedback on applications, she doesn’t waste time on unqualified deals. With eligible deals, she has cut her processing time in half, which quickly enabled her to double the number she could handle at one time. MMS also provides a rigorous structure for her and her clients, allowing her to make quick, quality decisions and give clients specific feedback on their application.
Her use of MMS has paid off. In the first year Devon has been able to loan nearly $500,000.
“The way it was done in the past — with loan officers chained to a desk — it’s not the best model,” said Devon. “MMS leaves me with more in-the-field time for presentations, relationship building with referral partners and connecting to the community.”
Devon produced quick results because she was willing to immerse herself in the MMS process and study the underwriting approach diligently. She also conferred with Accion Texas’ underwriting team, to give them what they needed for fast turnaround.
Where does Devon plan to go in the next two years with MMS? “In two years we should be able loan close to $800,000 with an loan average of $15,000 to $20,000,” said Devon. She recently hired a junior loan officer to help her meet that goal.