A Catholic priest here who lent a total of $20,000 to 50 people last year with the understanding that they would multiply the money for Christ says the project has turned out to be a "phenomenal flop."

"I lost $18,000. Only five people returned the money. The rest never returned it," said the Rev. Edmund J. Nadolny, director of the Offices of Radio and Television and Evangelization for the Hartford archdiocese.

The loan project was designed to test the parable of the use of talents and was intended to generate funds for a massive evangelization program started by Nadolny's offices. He said the offices' entire 1979 budget is $15,000, and $400,000 would have been required to carry out the proposed evangelization program.

Nadolny said he took out a personal loan for the "sharing God's talent" loan project, which he promoted over the radio.

He said: "Forty percent of the people who received loans gave the wrong names, wrong phones, wrong addresses and can't be contacted. And 50 percent never used the money for the creative ideas they described. They used it for themselves."

Some of those who left their real names and addresses, including several people operating their own businesses who took $1,000 loans, told the priest when he tried to collect: "Get off my back . . . go to hell . . . maybe, I'll pay you back . . . "

They couldn't care less. Ninety percent of them lied," Nadolny said. "I'm responsible to pay back the loan and I'll pay it back with my own salary."

Nadolny said the five people who have returned their loans borrowed and total of $1,200 and returned $2,200.

Nadolny said the backgrounds of people receiving loans weren't scrutinized because the project was designed to exemplify Christian trust and faith. They were simply required to sign a commitment form.

The priest said that when he looked back, the people who cheated him had several characteristics in common: "They were all in a state of financial panic, had no financial reputation and couldn't get loans anywhere. They were financial risks. They had no sense of commitment."

The priest has organized a car raffle to help offset the loss.