620.1078. Distribution of moneys--interest--categories of permissible loans.

MISSOURI STATUTES AND CODES

620.1078. Distribution of moneys--interest--categories of permissible loans.

Distribution of moneys--interest--categories of permissible loans.

620.1078. The department of economic development shall distributemoneys, in the form of loans or grants to eligible lenders from themicroenterprise revolving loan fund within the limits of appropriationsmade by the general assembly. The eligible lenders shall charge the marketrate of interest for loans made pursuant to sections 620.1069 to 620.1081.No loan shall be made pursuant to sections 620.1069 to 620.1081 for therefinancing of existing debt. Loans may only be made by eligible lendersin any of the following categories:

(1) Group-based loans shall be available to microenterprises in needof loans between five hundred dollars and seven thousand five hundreddollars. A group-based loan program shall be approved by the eligiblelending institution. A group shall consist of between five and seveneligible members who shall meet to make credit decisions, help one anotherin the solution of business problems, and receive loan repayments. Theinitial loan made by the group to the first eligible borrower shall notexceed two thousand five hundred dollars. All such loans shall be subjectto examination by the state auditor;

(2) Institution-based loans shall be available to microenterprisesdirectly from eligible lenders in amounts of between seven thousand fivehundred dollars and fifteen thousand dollars. Such loans shall be made byeligible lenders who possess significant experience in providing businessassistance. Repayment of such loans shall be placed in a revolving loanfund established by the eligible lender as provided in subdivision (1) ofthis section for group-based loans. Institution-based loan applicationsshall be reviewed by a credit committee which shall judge the merits of theproposed loan according to the local economy, the borrower's character, andthe credit risk of the proposed loan. Institution-based loans shall besubject to examination by the state auditor the same as group-based loans;

(3) Challenge loans and grants shall be made available to eligiblelenders. Such loans and grants shall be made to groups which demonstratenew or innovative approaches to microenterprise development, as determinedby the oversight committee established pursuant to section 620.1069. Allsuch loans and grants shall satisfy the requirements of section 620.1075.Loans shall be made available from a group to microenterprises in amountsof between five hundred dollars and seven thousand five hundred dollars.Repayment of such loans shall be placed in a revolving fund established bythe lender similar to that as provided for in subdivision (1) of thissection.