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A new program that provides micro-loans for poor people in danger of losing their housing is coming to Vancouver.

The city is set to approve a plan to provide $150,000 over three years to a new, Vancouver-wide rent bank run by a local non-profit, similar to those that operate in Ontario, Prince George and Surrey.

Vancouver Councillor Kerry Jang said he believes that by providing small amounts of money through loans, the city can help people stay out of expensive shelters and keep families stable.

"This is to help with the people we are hearing about [at Vancouver neighbourhood houses] like a single mom who has come in and asked for help, she's between jobs or has a job and had a crisis or she wants a chance to move into a decent place but needs a damage deposit," Mr. Jang said.

The city's money will actually cover part of the administrative costs. The Streetohome Foundation, a group of business people raising money to combat homelessness, is donating the loan money that will be distributed.

The foundation's $150,000 a year is expected to provide 540 loans a year of about $835 apiece over the three years of a pilot project. A report from city manager Penny Ballem says it will potentially prevent 1,620 evictions in that time.

But for every dollar lent, another one will be spent on counselling and support services, both for those who get loans and the many who don't, in order to help them access more services and manage their money. Vancity Credit Union will provide financial literacy training.

There's already been a tiny rent bank running in Vancouver, which started at the Ray-Cam Community Centre with a $5,000 loan pool in 2008 "The people who use our centre work really hard, some are working poor, making just enough money to get by. But one small glitch and you're in trouble," said Judy McGuire, who sits on the executive of the Ray-Cam board.

The centre found that just by lending a small amount to pay a utility bill or a rent backlog, it saved the families from enormous stress and possible eviction.

That program was then taken over and expanded by the affiliated Network of Inner City Community Services Society. Vancouver's rent bank will be run by that society.

It will be targeted to six neighbourhoods with a high proportion of renters and low incomes: the West End, the Downtown Eastside, Marpole, Commercial Drive, Mount Pleasant and Oakridge.

People who get loans will have to demonstrate they're having a short-term crisis, not a structural problem of more expenses than income. They'll be allowed only one $1,000 loan in any two-year period.

Surrey's rent bank has lent out $75,000 to 88 households with 300 people in them during its two years of operation. Just over $15,000 has been paid back so far. (The usual repayment rate in long-running rent banks is 70 per cent.) More than 60 per cent were facing eviction; 60 per cent also had children.

The team leader for Surrey's rent-bank program, Judy Peterson, said she gets about eight inquiries for every successful loan.

"If we provide a loan, our main question is, 'Will this loan provide stability?' If you came in with just too much debt or you made bad choices – your income is $1,500 a month and your car payments are $900 – then it's, 'No, we can't solve this problem with a loan,' " Ms. Peterson said. That applicant gets counselling instead.

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