Banking On The Work Ethic

James Gutierrez built a micro-lending success on trust

James Gutierrez


It’s easy to get a loan if you have the right assets, credit score and bank account size. Without them, it can be impossible. That’s why James Gutierrez built a unique lending firm that determines credit-worthiness by examining work ethic, and sense of responsibility and obligation. Indeed, his borrowers, mostly Hispanic immigrants, often have little more to offer as collateral. But it’s enough. Gutierrez is the driving force behind the California-based micro-lending firm, Progreso Financiero. Granting small loans to people of very small means is a concept most closely associated with the developing world. But the model has a growing place in the developed U.S. as well. Indeed, micro-loans of up to $2,500 are making real differences in the lives of Progreso’s clients. Customers seek such loans for a variety of reasons, from buying a piece of equipment for a garage-based chair repair business to fixing the brakes on a car desperately needed to get to and from work. To a traditional lender, small borrowers lacking credit histories or even bank accounts are generally considered far too high-risk. Gutierrez, 33, a Mexican-American himself, has seen close-up the challenges they face when attempting to secure loans. Which is why he and his founding team take a different approach. They consider a customer’s “moral collateral.” The intangible is proving to be as strong a predictor of loan repayment as the tangible financial assets used in credit-score qualifiers by traditional financial institutions. When studying for his MBA at Stanford University, he led a research project focused on the Hispanic market and communities in the U.S., which found they are poorly served by mainstream financial institutions. From there, it was a short step to Progreso’s lending concept.

Securing Investment Capital

Of course, Progreso Financiero’s launch depended on – what else? – borrowed money. Even micro-loan firms need capital. Just like his own applicants, Gutierrez and his team had to seek investment funds. They were armed only with a creative, but challenging, business premise and the strength of their commitment.


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