By BRENT MARTIN
St. Joseph Post
It laid dormant for years. Now, interest in the Missouri low-interest loan program, called MO BUCKS, has risen along with interest rates.
State Treasurer Vivek Malek says his office distributed $500 million in MO BUCKS loans last year, hit the state cap and closed. It re-opened January 2nd with $120 million available.
“I was hoping that it would be open for at least for two weeks, but to our own surprise, we received enough applications to close the program again within six hours,” Malek tells KFEQ/St. Joseph Post.
Malek says how swiftly the $120 million was snapped up shocked him.
“All the $120 million was called for within six hours,” Malek says. “So that shows how huge the demand is for the MO BUCKS program, especially in the farming community and the small business community.”
Malek says demand rose from farmers seeking low-interest loans to cope with the financial impact of the lingering drought in parts of Missouri.
Malek has asked the state legislature to expand the program by $400 million. The current cap is $800 million.
“That may not be enough, but we hope that the feds will bring down the rates and that will probably ease the demand a little bit.”
MO BUCKS was created during the recession of the 1980s, a recession that drove up interest rates and hit the rural economy hard. It became a lifeline for farmers and small business owners.
The Federal Reserve has moved over the years to reduced interest rates to stimulate the economy. The Fed took a different tack as inflation returned, raising rates in an effort to bring inflation down. In between the high-interest rates of the 80s and the low interest rates of the past few years, the MO BUCKS program went into hibernation. Few remember it. Malek says that even among bankers the program had been forgotten.
“There’s not much education on MO BUCKS. We don’t have a marketing budget for MO BUCKS,” Malek explains. “So, I toured about 45 counties, rural counties especially, last fall, talking to chambers of commerce, talking to officials, (in) courthouses, different media houses to kind of alleviate and bring that education up with folks that, hey, there is a way that can help you during these high-interest times and we can help.”
The MO BUCKS program provides interest rates approximately 30% below the market rate. About 40% of the loans go to farmers with 60% to small businesses.
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