The loan rangers.

• Author: Nash, Betty Joyce
• Position: Durham, North Carolina-based Center for Community Self-Help - Profile

Who are these do-gooders lending a helping hand out on the financial frontier?

In 1980, Martin Eakes and Bonnie Wright were burning up the highway, crisscrossing North Carolina on a self-appointed quest to help minority businesses. Two of their beat-up cars caught fire, but the couple salvaged the scorched records of the nonprofit organization they'd just formed: the Durham-based Center for Community Self-Help.

Though their idea was simple, its accomplishment would be an uphill climb: finding ways to channel capital to individuals and businesses spurned by conventional lenders. Eakes and Wright have since forged the Self-Help Ventures Fund, a $14.3 million revolving loan fund, and the Self-Help Credit Union, a federally insured institution with $39.6 million in assets.

The $40 million it has lent has attracted the attention of community-development advocates including Bill Clinton, who cited Self-Help's work as a model of success in a speech last summer. Self-Help, the president noted, showed that it's possible to successfully lend money to people with poor or nonexistent credit records. Charge-offs have averaged 3% of total loans in the ventures fund and less than 0.5% in the credit union. Self-Help's example -- plus, of course, stricter enforcement of federal community-investment standards -- has helped shame bigger banks and S&Ls into doing more lending to minorities and women.

"I think |banks~ have been able to see the things that Self-Help has been able to do with much less cash," says Abdul Rasheed, chairman of the center's board of directors.

Now, with banks loosening their credit to those who've traditionally had trouble getting loans approved, one might expect Eakes to worry about Self-Help's role. Instead, he considers his group's efforts a drop in the bucket. At least 300,000 additional households in North Carolina could own homes, he says, were it not for delinquent medical bills or other credit problems that scare off conventional lenders.

"That's roughly $15 billion of unmet need -- or unmet opportunity," he says. Through 1992, Self-Help had made only about 500 mortgage loans to first-time home buyers. Most, 70% to 80%, went to minorities and single mothers. The median household net worth of blacks in North Carolina is about $4,000, compared with whites' $58,500. That's largely correlated with home ownership: 40% of North Carolina's black households own houses, compared with 75% of whites. "We should not tolerate that as lenders," Eakes says.

To spark further change, Eakes is overseeing Self-Help's biggest expansion to date. Staffing has more than doubled in the past two years to 37 as the organization has acquired...