Written by Michael Swan, The Catholic Register, Thursday, 22 March 2012 10:25



The St. Vincent de Paul Society and the Ursuline Sisters in Chatham, Ont., are not likely to make a dent in Canada's $2 billion per year payday loan industry, but in their own small way will be taking them on.

On May 1, 2010 the Ursuline Sisters used $20,000 to launch a microfinance venture they call Angela's Pocket. With close ties to The Women's Centre and the local United Way, Angela's Pocket has lent out about $8,000 in small loans to women who otherwise couldn't raise money. The loans are for everything from a return to school to basic household appliances.

Now Chatham's St. Vincent de Paul conference wants to get in on the local microcredit boom by providing a similar service to men. They plan to call their loan fund Vinnie's Wallet.

Ontario St. Vincent de Paul president Jim Paddon looks around his home town of Chatham and shudders at the proliferation of payday loan storefronts. With interest charges just below the criminal code limit of 60 per cent, plus cheque cashing fees, transaction fees and brokerage fees, a pay day loan to tide a family over can wind up costing big time.

"One of our biggest concerns is these corner money mart places," he said. "Maybe the rate is not too bad at the beginning, but boy if they don't pay it back on time the interest rate is astronomical."

Paddon wants to give people an alternative. For now, neither Angela's Pocket nor Vinnie's Wallet is taking business away from storefront loan operations. To qualify for an Angela's Pocket loan a client must not be eligible for a bank loan. Most Angela's Pocket clients have no Paddon.

"We really have to focus on actually looking at different projects — things we can do," he said. "(St. Vincent de Paul) believed in action first and then words. I think we have to demonstrate that there are things we can do."