One of my dreams about how to help the poor is for churches to create banks, lending organizations, or something that actually puts money in the hands of people who need it. I was delighted to discover examples of this.
Payday lenders are everywhere in impoverished areas. These lenders provide small loans to the working poor so that they can cover the gap between today, when a payment is due, and next week, when their paycheck arrives. These loans are incredibly exploitative, carrying exorbitant fees and high interest rates. Traditional banks avoid offering such small loans, not because they’re risky, but because the cost of doing the paperwork could exceed any potential return.
However, these loans do fill a painful gap in our financial system. In Worcester, Massachusetts, I knew people who relied on payday loans for medical bills, car repairs, and to fix damage to their apartment. While all payday borrowers are employed, those living paycheck to paycheck simply cannot afford to repay the full loan amount when it comes due—typically within a week. Though the interest seems manageable if repaid immediately, few borrowers can manage to make that quick turnaround work.
One organization, Exodus Lending, started up at Holy Trinity Lutheran Church in South Minneapolis, Minnesota, in 2011, and has now been spun off as its own nonprofit. This community-organizing congregation wondered why there were so many payday lenders operating in their neighborhood. For ten years, the congregation worked to end the practice of predatory lending in Minnesota, but as they continued to learn about the industry, they discovered an uncomfortable truth: people in low-income neighborhoods genuinely needed these services. Where else can someone go when they have an emergency expense but have no credit card, bank account, or family with extra cash?
Holy Trinity responded by offering to refinance payday loans out of the church office. Their initial plan was simple. They raised $10,000 and began refinancing small loans interest free. To date, they have a ninety percent repayment rate.
While Exodus Lending was initially concerned that their church connections might deter people from working with them, it turned out that this was exactly what people needed to understand that a lender offering zero percent interest was not a scam!
There’s an interesting lesson to be learned from these payday lending alternatives. Many of the borrowers did not need education about budgeting or lending. They knew exactly what was going on with these predatory loans. The problem was that there wasn’t another choice for dealing with emergencies.
Every neighborhood in every city should have a church working to address the exorbitant rates that people face from payday lenders. We need to take action politically to make it illegal to charge such high rates, but also locally to provide simple, straightforward alternative lending sources for people facing emergencies.
Rev. Elizabeth Mae Magill is a pastor, writer, and advocate for the unhoused and hungry. This reflection is adapted from her latest book, When Did We See You? A Lenten Exploration of Poverty and Wealth (Upper Room Books, 2026).
What small, tangible act of justice could your faith community offer today?
How might we listen more closely to the actual needs of our neighbors?
In what ways do systems in our community reflect (or betray) our values?
When have you seen a church respond courageously to local suffering?
Share your responses with others in the comments below!
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