Oxfam plants $3 million in loan seed money in minority banks. Agency hopes move will bring in more funds to aid US poor
Boston — Oxfam America, which provides help to depressed third-world peoples, has opened an avenue for aid to minority financial institutions in the United States. The organization has deposited $3 million in 30 minority banks ($100,000 in each) and named the Boston Bank of Commerce, New England's only black-controlled bank, as trustee.
``Our goal is to encourage other organizations, both business and nonprofit, to deposit funds in minority banks around the nation,'' said John Hammock, Oxfam's executive director.
``We consider this a unique venture, one that reflects what we are doing overseas,'' Mr. Hammock said last week in Boston. ``Our goal is to inspire community development in the United States by placing funds in small minority banks in depressed areas. We are putting the poor at the center of our program.''
The Oxfam gesture is the first step in a program being initiated by the National Bankers Association, says Ronald Homer, president of the Boston Bank of Commerce and a former president of the association, which represents 65 minority banks in 33 states.
``This is not only a good social action by Oxfam, but it's a good business venture,'' Mr. Homer said in an interview. ``It gives minority banks more leverage to make loans in their communities, usually not served fully by most major financial institutions. And we believe that Oxfam will be able to do its job better and reach more people by making this deposit.''
Social conscience at home helps not only minority entrepreneurs and communities, it also helps the nation's economy, says Edward W. Brooke, a former US senator from Massachusetts who is chairman of the board of Boston Bank of Commerce.
``Most do-good organizations put their money into big banks, money that rarely touches communities where the poor and minorities live,'' Mr. Brooke says.
``This $3 million deposit is of major value to our black community here in Boston as well as to other minority neighborhoods across the nation,'' Brooke says. ``This will provide these banks with additional financial ammunition to revive their service areas.''
The National Bankers Association is involved in conversations with the United Way of America, Homer says. ``Our objective is to encourage the national United Way to place an Oxfam-type deposit with us,'' he says. ``We also are asking the national office to encourage local United Way groups and member organizations to place more of their funds in local minority financial institutions.''
The association is seeking to reach foundations, educational institutions, municipalities, churches, and other service institutions -- groups that rarely do business with minority banks, says John Kelly, executive vice-president of the National Bankers Association, headquartered in Washington, D.C.
``Our program is at the concept stage,'' he says. ``We can service the not-for-profit sector in various ways. For example, we can be a cash-management record-keeping agent, and we can be a pooling and monitoring agent for these funds. We assure depositors that their funds receive the best possible interest.''
The association plans to sponsor a national conference on how minority banks can best serve these agencies, he added.