This week we explore whether technology is really a development silver bullet, if banks are too costly to absorb the unbanked, and two very different innovations in financial services in San Francisco.
- As the movement to bank the unbanked grows, Lisa Servon reminds us that the costs of “formal” banking services are often even higher than the costs of checkcashers and other non-traditional services.
- Charles Kenny and Justin Sandefur of the Center for Global Development have a “long read” in Foreign Policy, asking, “Can Silicon Valley Save the World?”
- The move to a cashless economy has been much slower than many advocates have predicted. Case-in-point, that a sandwich store in San Francisco, tech hub that it is, has gone cashless is actually news.
- University of Chicago social scientist Harold Pollack takes “rules of thumb” to a whole new level, claiming that all the financial advice you’ll ever need can fit on a 4x6 index card.
- Recently the New York Times ran two related opinion pieces on poverty – one focusing on how government anti-poverty programs ignore childless singles and the other by Joseph Stiglitz on the growing challenge of addressing inequality.
- San Francisco-based Mission Asset Fund brings documentation and guarantee services to the traditional lending circle model to help Latino residents build credit. A recent profile on NPR’s Marketplace highlights the hybrid formal-informal approach to financial services.
- After you pay for your sandwich with your phone, you might be able to walk next door to the drug store and do all of your banking – Walgreens announced it will begin providing financial services at 8,541 locations.
Editors’ Note: Hi, Laura and Jonathan here. A few of the pieces this week come from people who spent years up close with how poor households actually handle money, and keep coming back with something more tangled than the story usually told, and more persistent. Tim will be back for the next edition. - Laura Freschi and Jonathan Morduch