Arlo Washington lives in Little Rock, Arkansas — a city infamous for resisting school desegregation in 1957. Now, the city is still racially, economically, and even physically divided by a highway. On one side of the freeway is the heart of the city’s Black community, where homes are boarded up. Across the interstate sits a nicer neighborhood that is predominantly white. Washington, who works as a barber, is trying to close that wealth gap in his Little Rock neighborhood.
Eight years ago, he started a small non-profit loan organization based out of a converted shipping container. It was the first Black-owned bank in the state. Washington’s story is the subject of an Oscar-nominated short documentary called The Barber of Little Rock, directed by John Hoffman and Christine Turner.
Washington grew up in Little Rock with his two younger sisters. When he was 17, his mom died of cancer, and he was left to take care of them. Not long after that, as Hoffman explains, he dedicated himself to hair. Then he opened his barber shop and eventually other locations.
Over time, the shop became an important community hub, and Washington realized that a financial credit gap existed in the community.
Patrons asked Washington to spot him some cash until they started a new job or to help pay back rent.
“These small loans were having a really outsized impact on people's lives, and people were paying him back,” Hoffman says. “[He] looked around and saw that there were really no financial institutions that these people could turn to — other than a payday lender that was going to really lead to a debt trap that people could not get out of. People had nowhere else to turn to.”
At the recommendation of his uncle, who worked as a security guard at Chicago’s Community Development Financial Institution (CDFI), Washington opened his own loan fund.
The CDFI program was established in 1994 under the Bill Clinton administration. It was designed to help give more people access to financial services, particularly in the Black community, which had been historically excluded from the American banking system, Hoffman explains. In total, more than 1,000 CDFIs exist in the nation.
Washington’s organization, called People Trust, determines who to lend money to based on employment instead of traditional factors such as credit scores.
“A lot of the people that they are providing resources to don't have access to credit historically. Their families don't have access to credit, historically. This is the consequence of generational lack of wealth and people not having collateral. They don't have a home that they can use as collateral for a loan. They don't have the savings that they can point to as a collateral.”
People Trust also ideally starts with a small loan that is within a person’s capacity to repay. Then, if needed, the loans increase.
Washington also has the capacity to provide grants to those who need them. In the documentary, he is able to cut a check to someone who lost their home in a fire.
“The philanthropic community of Little Rock, Arkansas, understands that as a frontline defense against really unnecessary hardship, Arlo can be preventing people from falling between the cracks literally, and being lost. These are life saving grants that Arlo is able to make.”
Hoffman says that Washington’s work in Little Rock can be used as an advocacy tool to raise more awareness around the CDFI program, and eventually get more funding appropriated for it.
“Congress appropriates hundreds of millions of dollars every year to the CDFI program. The racial wealth gap, as Arlo says in the beginning of the film, and it's a truth that he states, is a $1 trillion problem. So the few $100 million that Congress is appropriating every year for the CDFI program is literally a drop in the bucket.”
