Underground lending circles key to helping low income individuals get out of debt

http://www.sciencedaily.com/releases/2013/06/130604153513.htm

An innovative financial lending program is helping low-income individuals build credit, reduce debt and find their financial footing.

In a lending circle, participants join a group of at least four individuals in which each contributes an equal amount and receives the total sum in rotation. For example, someone participating in a circle with seven other people could contribute $100 a month for 8 months in exchange for an $800 loan.The report also found lending circles helped participants reduce outstanding debt by an average of $1,000 versus a control group that increased its debt by an average of almost $3,000 over the same time period.

For the financial sector, there is this underground economy that they're not tapping into," Reyes said. "People are lending to each other informally and surviving every day without banking. Lending circles are a way of reaching these individuals in a way that is culturally relevant."

 This all reminds me of my ideas to buy property with friends/family, so as to reduce to total debt and thereby interest accrual. Not to mention my crazy ideas about living with people permanently, rather than in a conventional 4 walled nuclear family, allowing us to share resources and manipulate bulk buying and cost savings for the whole group!