In the News
September 1, 2011
Unbanked in America
The Microfinance Gateway discovers "5 Things You Didn't Know About Microfinance in the US." Point #4 in the article references the forthcoming work of the U.S. Financial Diaries team in understanding how families in low-income communities across the U.S. are making ends meet. Here's an excerpt: As with microfinance clients in other parts of the world, commonly cited reasons for being unbanked are insufficient funds to open an account, banks feel unwelcoming or they do not trust banks, lack of documentation, and a poor credit history or no history. Despite the large number of CDFIs operating in the US, many remain small or offer only a limited number of services to their customers (i.e. loans to microenterprises but not individual savings accounts). As a result, underbanked households often turn to AFS providers to manage their financial needs. These services can be expensive and are not covered by deposit insurance, but are very popular and represent $320 billion in annual transactions. A financial diaries project is underway in the US using the same methodology behind Portfolios of the Poor. The partnership between Bankable Frontier Associates, Center for Financial Services Innovation, and Financial Access Initiative aims to better understand how low-income Americans manage their financial lives.
September 1, 2011
From Credit to Savings
FAI's Jonathan Morduch recently published an article on the impact of the Gates Foundation's financial services for the poor program. The article is in the September 2011 issue of Alliance Magazine's special feature, Living with the Gates Foundation. Here is an excerpt from the article: When the Gates Foundation started a programme to expand global ‘financial services for the poor’ (FSP), many in the field, myself included, saw this as an important complement to the foundation’s work in health and education. The evidence is piling up that the world’s poor face the twin problems of low incomes and difficulty managing their incomes without bank accounts or insurance. Finance, in this view, allows people to invest in the future and – importantly – to marshal resources to meet needs today. Access to finance, then, is a key tool for improving the lives of the poor. The Gates Foundation’s impact on finance for the poor has been most strongly felt in re-balancing attention between credit and savings.
July 1, 2011
The Truth About the Underbanked
The low-income consumer has been an elusive market for financial institutions. Despite all the initiatives to lure them into the banking mainstream-prepaid debit cards, peer-to-peer lending groups, savings accounts with matching funds-more than two-thirds of Americans making less than $30,000 remain unbanked Starting this November, a group of researchers will begin the U.S. Financial Diaries, a new project that will track the financial behavior of 300 families in four American cities through biweekly interviews conducted over the course of 15 months.
June 1, 2011
Why Finance Matters
Roughly one-half of the world's adults, about 2.5 billion people, have neither a bank account nor access to semiformal financial services such as “microcredit,” the growing practice in developing nations of providing small loans, typically less than US$500, to self-employed people. But what if they did? Muhammad Yunus, the 2006 Nobel Peace Prize winner and founder of Bangladesh's Grameen Bank, a pioneering microcredit institution, argues that this lack of financial access means that the poor, especially poor women, can't obtain the loans they need to build their businesses and get on a path out of poverty. Note: when arriving at the destination site for this article, you are required to register to read it.
April 1, 2011
Poor Need More Financial Services than Rich
Why would that be the case? The answer is risk. Poor people (especially in developing countries) have a larger share of their assets at risk due to theft, a family illness, or funeral. In addition to risk, this article discusses the implications of high interest rates on the poor, while referencing "Portfolios of the Poor."
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Press Contact
Su Patel
The Financial Access Initiative
NYU Wagner Graduate School
Public Service
Su.patel@nyu.edu212-998-7536
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