At the Mi Pueblo Food Center in San Jose, Calif., a customer headed to buy juicy mangos dulces grandes on sale, two for a dollar, can stop first at a small kiosk and take out a loan to pay for a car repair or other unexpected bill.
The kiosk is one of the 74 Progreso Financiero outlets in California and Texas, often tucked into Hispanic supermarkets, where its agents offer unsecured loans to working people with thin credit histories.
The venture-backed private company charges interest rates up to 36 percent on a yearly basis — much more costly than a bank loan. But it lends to customers that banks often don't serve, said James Duran, chair of the Hispanic Chamber of Commerce Silicon Valley, which wants to preserve credit options for those consumers. It has even opposed local ordinances to restrict payday lenders whose interest rates, on an annual basis, can reach 500 percent or more.
"Some people don't have a choice,'' Duran said. "The alternatives are not very good.''