Ka Wai Ola - Office of Hawaiian Affairs, Volume 31, Number 2, 1 February 2014 — Study shows effectiveness of OHA loan programs [ARTICLE+ILLUSTRATION]

Study shows effectiveness of OHA loan programs

By Harold Nedd For Raymond Ciriako, it has not always been easy trying to earn a living off his passion. He and his wife, Shelly, almost couldn't get off the ground a familyowned business in Kailua-Kona. Luckily, he stumbled on a loan program at the Office of Hawaiian Affairs, whieh made $34,000 available for him to open Precision Auto Repair Corp. "We were turned down by every bank for a start-up business loan," Ciriako said. "OHA was the only one who wanted to help us. We are very blessed and grateful to OHA for helping us get started." According to a recently completed study by the Research Line of Business at OHA, he is not alone. The study of more than 1,100 Hawaiian borrowers revealed the effectiveness of

OHA's two loan programs. The study, whieh will be released this month, was based on surveys of Hawaiian borrowers who took advantage of OHA's Mālama Loan and Consumer Micro-Loan programs between 2009 and 2012. The Mālama Loan offers interest rates that don't squeeze wallets and is used by borrowers to expand businesses, improve homes, consolidate debt and continue their education. The Consumer Micro-Loan is strictly for Hawaiians faced with unforeseen emergencies. Among the key findings of the 100-plus page study is that 97 percent of borrowers feel they would have been worse off without the loan. The study also concludes that 12 percent of borrowers received more than one loan from OHA. Other key findings: • OHA's two loan programs are needed; they complement one another; and have ben-

efited borrowers. • With help from these loans, borrowers have seen a $4,800 average increase in their annual household ineome. • In addition, borrowers credit the loans for a significant increase in their overall sense of well-being due to relief from such factors as stress over their finances. Since it was created, the Mālama Loan has been tapped by nearly 2,000 Hawaiian borrowers, who have received more than $34 million to start businesses, improve homes, consolidate debts and eontinue their education. At the same time, the Consumer Micro-Loan program has bailed out more than 400 borrowers who have stumbled

on emergencies ranging from auto and home repairs to funeral and legal expenses. "The results of the survey offer important evidence of our focus on improving a sense of eeonomie well-being among Hawaiians,"

said Kamana'opono Crabbe, Ka Pouhana, Chief Executive Officer at OHA. "Providing resources that ean help improve conditions in the Native Hawaiian community is among the ways we are fulfilling our purpose." ■

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A study to be released in February found that 0HA's two loan programs positively impact borrowers, contributing to both an improved sense of well-be-ing by alleviating financial stress and a boost of $4,800 in average annual ineome. Raymond Ciriako, right, with wife Shelly, credited an OHA loan with helping get their auto repair and maintenance business started after being turned down by banks. - Courtesy photo