Huntington Bank (NASDAQ: HBAN; www.huntington.com) today announced a unique microlending partnership with the state of Michigan and the Michigan Economic Development Corporation (MEDC). Thought to be the first program of its kind and a prototype for the nation, the Pure Michigan Micro Lending Initiative is backed by a Huntington statewide commitment of $25 million – including $5 million in support of Detroit small business lending starting immediately. Through the Initiative, MEDC-backing will make possible as much as $250 million in new total statewide lending by engaging other banks operating in Michigan that follow Huntington’s funding commitment in support of small business job growth.
Huntington is leading the Initiative in conjunction with MEDC as part of its commitment to invest in Michigan and help the Midwest economic recovery by supporting new job creation at the small business level to help reduce un- and under-employment. Huntington’s $25 million commitment will be distributed through lines of credit provided to community microlenders participating in the Initiative. The MEDC will provide initial credit reserves in support of the program, enabling up to $225 million in further bank partner funding for small business microloans. It is a new, repeatable model for microlending that other states can follow.
The program launched today in Detroit via community microlending partner Detroit Development Fund (DDF). It will target small business owners in need of atypically low, “micro” loan infusions beyond the scope of what traditional bank underwriting can finance.
Huntington will provide core lending funding to DDF of $5 million through 2018. In conjunction with MEDC backing and funding, and possible further foundation grant support and other bank funding, the total impact is expected to drive significantly more investment in Detroit small business development beyond Huntington’s initial funding, and serve as an example of what other Michigan communities can accomplish through locally created partnerships using the Initiative model.