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Maurice A. Jones in the WSJ: Getting PPP to the Communities That Need it Most

LISC's CEO Maurice A. Jones is quoted in a Wall Street Journal article on the challenges of ensuring PPP loans are accessible to entrepreneurs of color and those in underinvested communities. Data is a key to understanding who's benefiting, says Jones, and LISC's PPP program has targeted underserved borrowers who may not have traditional banking relationships.

The excerpt below is from:
Policy Makers Aim to Ensure Underserved Communities Have Access to PPP Loans
By Amara Omeokwe, Wall Street Journal

...Still, collecting optional demographic data isn’t an exact science. When the SBA releases demographic information for its 7(a) program, it includes a caveat that “since the information is provided by the loan applicants on a voluntary basis, it is not necessarily inclusive of all SBA borrowers, nor can its accuracy be verified by the Agency.”

Jeannine Jacokes, chief executive of the Community Development Bankers Association, a trade association for CDFIs, said she is confident PPP loans through the group’s member lenders are reaching underserved communities because “we know who we serve.” She said there would have nonetheless been value in the SBA collecting demographic information during the application process, even if borrowers weren’t required to provide it.

“Some information is better than no information in terms of knowing who you’re serving,” Ms. Jacokes said. The association has done analysis on an initial portion of the PPP loans its members issued, including using census tract information to determine whether some of the funds went to high-poverty areas, according to Ms. Jacokes.

“You can still make inferences with respect to access and who got access by collecting it at the end, but you can’t use that data to change anything”
— Maurice A. Jones, LISC CEO

The SBA earlier this month released the application PPP borrowers will ultimately use to request loan forgiveness. The form includes a spot to provide optional demographic information, aligning with a recommendation from the agency’s inspector general.

Maurice Jones, chief executive at Local Initiatives Support Corp., a community-development organization operating in 45 states, said tracking the information during forgiveness would be useful, but wouldn’t paint a complete picture.

“You can still make inferences with respect to access and who got access by collecting it at the end, but you can’t use that data to change anything,” Mr. Jones said.

Local Initiatives Support Corp.’s small-business lending company has so far been approved to issue roughly $50 million in PPP loans, according to Mr. Jones. He said the company opted to give PPP applicants the choice to provide demographic information, and the responses show more than half of borrowers are people of color.

Collecting the data at the front end can help illustrate “what kind of institutions are actually making it through your pipeline to access the capital you’re making available,” Mr. Jones said. “And that’s important to me as to whether this is an inclusive initiative or not.”

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