Kamloops will soon have another tool for chipping away at homelessness and at the client list for payday loans.
A rent bank - a community lender of last resort for working poor who find themselves in financial crisis - is about to start.
The Kamloops Rent Bank will be available to assist individuals and families starting in February, said Tangie Genshorek, co-ordinator of the Kamloops Homelessness Action Plan.
According to research, six out of 10 Canadians would be in financial trouble if they missed one paycheque, an indication of how great the need may be for emergency rent.
"It's key," Genshorek said.
By providing small, low-interest loans, rent banks assist people when they find themselves in crisis. The service will be provided only for people who are not receiving income assistance. They may have had a death in the family or a medical emergency, said Louise Richards, executive director of Kamloops and District Elizabeth Fry Society.
"Who knows? A lot of the time, people do want a loan," she said. "They don't want money handed to them."
Typically, there is a two-year payoff period for each loan.
The bank will be located at the society's offices at 827 Seymour St., where Janet Bakke will be in charge of assessing qualifications and need. Part of the loan process will involved financial education to ensure recipients don't get caught in the same bind again.
The Kamloops Homelessness Action Plan committee has been focused on a rent bank startup here for the past year, a need identified by the Changing Face of Poverty committee.
The idea is to keep people from falling into the payday-loan trap by offering a lower-interest alternative, something in the order of prime plus two per cent. Payday loans in B.C. can fetch as high as 23 per cent interest, which is not as costly as they were before B.C. brought in strict rules in 2009.
Toronto was among the first Canadian cities to start a rent bank, in the aftermath of the 2003 SARS outbreak when low-income hospitality workers were left high and dry by a drop in tourism, Genshorek said. Since then, the Ontario provincial government has taken up the initiative. Vancouver, the Fraser Valley and Prince George have recently followed suit.
"We're trying to prove its validity here," she said. "There's a real cap in programs available currently, everywhere but Ontario."
Roughly $39,000 has been donated by Interior Savings Community Investment Fund, the Kelson Group, United Way and The Stollery Charitable Foundation. The Kamloops rent bank working group is seeking additional funding.
Donations are accepted through United Way and the Elizabeth Fry Society.