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Banking on Financial Horsepower : South-Central: New resource center expects to initially make 25 to 40 business loans. Credit and capital have long been needed in the area.

April 25, 1993|ROBERT J. LOPEZ | TIMES STAFF WRITER

A new multi-service financial center aimed at increasing access to credit and capital for long-neglected inner-city residents and businesses has opened in South-Central.

Housed in a former bank at 4060 S. Figueroa St., the Community Financial Resource Center will provide loans from $500 to $250,000 for business start-ups and expansions in South Los Angeles. The center, a collaboration of 28 banks, six community-service organizations and the city's Community Development Department, will also offer instruction in basic banking services, home mortgage procedures and business development planning.

"The center is the first step to providing all the resources needed to help businesses expand, to help residents start businesses, own their own homes and really control their own destinies," said Robert McNeely, a senior vice president of Union Bank and chairman of the center's board of directors.

Among the banks participating in the center are First Interstate, Wells Fargo and Bank of America.

Rebuild L.A. donated $50,000 to renovate the center's building. The center's service providers will be available to explain their programs at an open house scheduled for Friday and Saturday.

The center is starting with about $1.5 million and expects to initially make 25 to 40 business loans, said its executive director, Roberto Barragan. The CDD provided $650,000 and the banks donated an additional $150,000, Barragan said. The remaining $725,000 will come from bank loans.

Home mortgage loans for eligible residents will be made by the participating banks. If the lending program is successful, Barragan said, the city and the participating banks have indicated that they would be willing to provide additional funds.

The center was the direct result of a study on economic development in South-Central conducted over the past two years by the Los Angeles Community Reinvestment Committee, which included representatives from financial institutions, community-based organizations and city government.

Among the committee's most startling findings: In a 40-square-mile area of South-Central, there were 133 check-cashing stores but just 19 bank and savings & loan branches in 1991 to serve 587,000 people. In contrast, nearby Gardena had 21 bank and savings & loan branches to serve 49,800 people, the committee found.

Community leaders welcomed the news of the center's opening.

"I think it's a very, very important step because it's bringing services to populations that have been 'redlined' (and thus denied financial services) for decades," said Gilda Haas, spokeswoman for Communities for Accountable Reinvestment, a Downtown-based coalition of minority and consumer agencies that monitors banking practices nationwide.

However, Haas and other community activists said they hope that financial institutions will eventually open new branches in South-Central rather than concentrate all of their operations at the center. Some also questioned whether the center can reach the area's residents, especially the approximately 45% of the population that speaks Spanish as its primary language.

Barragan said the center's multiethnic, bilingual staff is using newsletters, advertising and networking with community groups to get the word out.

But the news of the center, which officially opened March 15, had yet to reach some groups in the Watts area last week.

"We don't know anything about it. As usual, we are the last ones to know what's going on in our community," said Arturo Ybarra, president of the Watts/Century Latino Organization.

Information: (213) 233-1900.

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