A Q&A with José Quiñonez: The MacArthur grant 'genius' helping poor immigrants get loans

Source: John D. & Catherine T. MacArthur Foundation

José Quiñonez just joined a very exclusive club.

On Thursday, it was announced that the Bay Area activist is one of the latest winners of the MacArthur fellowship, a no-strings-attached $625,000 grant so prestigious its winners are referred to simply as "Geniuses."

It wasn't an easy path. 

His father was assassinated when he was just two years old, forcing his family to leave their farm in Durango, Mexico, for the state capitol: Victoria de Durango. Quiñonez sold newspapers by the local bus depot to earn money. After his mother died, he re-located to the United States, living as an undocumented immigrant until he was granted amnesty under the Immigration Reform and Control Act of 1986.

In 2007, he helped launch the Mission Asset Fund, a nonprofit that helps poor and unbanked immigrants get access to loans and improve their credit scores. 

Quiñonez in San Francisco office
Source: 
John D. & Catherine T. MacArthur Foundation

Mic conducted a phone interview with Quiñonez to talk about his organization's work, the benefits of bringing U.S. immigrants out of shadow economies, and what he's going to do with all his new money. 

What made you want to launch MAF?

When we started the Mission Asset Fund back in 2007, we were charged with a problem of helping low-income immigrant people in the Mission District [in San Francisco]. We soon found out it was difficult to help them develop their financial security when half of the population we were serving didn't have checking or savings accounts. They were completely outside of the financial system: 44% of Mission households had no credit score or credit history, so they were completely invisible. So that led us to develop lending circles. 

What are lending circles? How do they work? 

The conventional wisdom at the time was that the reason people were in that situation was that they either lacked information or were financially illiterate, or that all they needed was another course on how to balance their checkbook. But what we realized was that there were a lot of good things happening in the community that we didn't recognize. 

I don't believe the rhetoric that people are deficient just because they're poor. It takes a lot of ingenuity to survive and thrive in very harsh conditions.

They had a different way of saving and managing money, and [lending circles were] one of the ways: Coming together in groups and using those groups to lend and save money.

In Mexico, they're called "tandas," and basically they work like this: 

You have a group of 10 people who decide to put in $50 a week, so each week you have $500. And each week someone gets that $500. And they do that in rotation so that everyone has a chance. This activity has been going on for millennia. And that activity is actually bona fide financial activity — they're making financial commitments to each other, [but] it's just informal. So we decided to formalize it by getting people to sign promissory notes saying, "I'll pay this much on this date." So we're able to record that loan, and then report that loan to the credit bureaus.

By formalizing lending clubs, the Mission Asset Fund aims to help immigrants enter the financial mainstream.
Source: 
Mark Lennihan/AP

What kind of things are people purchasing?  

So the vast majority of folks, because it's a zero-interest loan, they use it to refinance high cost loans. So a lot of our clients use it to pay off payday loans, or outstanding car-title loans or loans that they may have with other credit cards or other lenders.

And to me that's pretty rational. 

You get this loan and then you refinance and you're better off economically. A large segment do that. Some of them use it as a savings habit. And then some of the people use the loan from the lending circle as a way to reinvest into their business. About 20% of our clients invest it in small business activity in some way. 

You're calling these people clients, but you're a nonprofit? 

You don't have to be a bank to use the tools of finance. We've just created a financial product based on this traditional practice that already existed in the immigrant community. But we've brought the added business of formalizing that into a loan that the financial system can understand. 

We want people to be in the financial mainstream; we want them to be able to access low-cost, responsible financial products that you and I have; we want them to be paying prime rates the way you and I pay prime rates for mortgages, car loans and whatnot.

Quiñonez at the Mission Asset Fund offices
Source: 
John D. & Catherine T. MacArthur Foundation

As someone who was once an undocumented immigrant — who has now achieved this kind of success — what do you make of the rhetoric of people like Republican presidential nominee Donald Trump? 

I know, having lived in the shadows and periphery of society, that a lot of the things people think about immigrants and poor people generally are wrong. We're not broken, we're not delinquent, we're not rapists. In fact, there's a lot of hardworking, value-driven, faith-driven people that are out there in the margins. 

I lived that experience. I don't believe the rhetoric that people are deficient just because they're poor. It takes a lot of ingenuity to survive and thrive in very harsh conditions. This award from the foundation, I don't take it as my own personal genius ... Really it's a recognition of the ingenuity that's already happening in our communities.

So I reject what the Donald Trumps of the world say about us. I know that that's not based on any sense of the truth at all. My sense of the truth is that we're hardworking individuals, hardworking families, and we want to give back and be a part of the American experiment. And we have a lot to offer. And [lending clubs are] another indication of what could happen if we're just unshackled and allowed to give back fully. 

What are you doing with your new grant money? 

I haven't really thought about it that much, frankly. I want to keep on doing what I'm doing. It gives me latitude and permission and security to be more adventurous in our work. But this is my passion and this is what I do.

Yeah, I will treat my wife to a nice dinner. But I'm fortunate to do what I do and I'm going to keep on doing it.

This interview has been edited for length and clarity. 

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James Dennin

James is a staff writer covering money and millennials. Send your tips and your money problems to jdennin@mic.com.

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