In Paris, a bank that has been in business since long before the French Revolution, Credit Municipal de Paris, celebrated its 375th birthday by forgiving the debts of 3,500 of its clients, reports GOOD. All customers with debts smaller than 150 euros were forgiven, the bank “simply [wiped] their slate clean.”
The bank, was “a kind of ethical pawnshop,” according to the story, which primarily served the poor as a sort of microlender, long before Kiva or anything like it even existed. It was called the “bank of the poor” and offered loans to poor customers secured by their valuables.
Founded in 1637 by Theophraste Renaudot, “a doctor, journalist and philanthropist who wanted to combat poverty by giving the needy access to fair banking.”
While prevailing APR in the 17th century could go as high as 150%, Renaudot offered loans at 10% APR — the sort of rate you’d be thrilled to have on your credit card today, in a time when access to capital was far more limited than it is now.
So to celebrate nearly 400 years in business, the bank is forgiving a nominal amount of debt. Nothing more than 150 euros ($195, according to latest exchange rates), but this will put cash in the pockets of 3,500 poor Parisians. Their debts forgiven, bank customers are free to pick up their valuables, and keep the cash they would owe otherwise.
The article explains that, because of the proliferation of banks like Credit Municipal de Paris, France is “a country without pawnshops.” One can find pawnshops even in decent American neighborhoods, but the whole nation of France hardly has a need for them, because of these responsible, non-predatory microlenders.
Imagine that! And not only are they not predatory, they’re profitable enough. On 93 million euros in outstanding loans in 2010, they booked profits of 1.3 million euros, reports GOOD. Not a bad business to be in. One imagines their CEO doesn’t take home an ungodly amount of stock options.