Cracking the code of finance
We have more than 30 million African-Americans alone who have never been giving a lesson in the money or how the free enterprise system or capitalism works. Not given financial literacy. After World War II black workers finally got good jobs. The net worth of middle-class blacks is still a fraction of the network of their white counterparts. With simply better financial and economic role models they have experienced free enterprise and capitalism is the world practice
These communities have an unmet need for mainstream banking service, access to credit, real estate investment, homeownership, and income generation thru small businesses such as gas stations, convenient stores/grocery stores, and entertainment
Action is paramount. Focused on the 100 million Americans that make $50,000 or less who defined themselves as the working people or underserved. Today struggling middle-class families and small business need to speak the language of financial literacy to help turn their situation. To live in system of free enterprise and not understand it is the modern-day definition of slavery. No knowledge of things as simple as earned income tax credit
Traditional banks are in a promising position to step in and offer these consumers bank accounts and some financial literacy training. This is a chance for banks to do well by doing good.
According to the FDIC in 2017 approximately 8.4 million households were unbanked. An additional 24.2 million were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system. That’s 24.2 million customers who could be better served by a good relationship with the bank they can trust and that provides them with timely access to information. Traditional banks that couple of non-minimum, no hidden fee checking account with a financial literacy course can easily gain new valuable customers while also improving the financial lives of those account holders. This is a different business model involved with its community, sponsoring local league teams, passing out turkeys on Thanksgiving. Giving back
Where most people see poor neighborhoods we see emerging markets, entrepreneurs, and small business owners investment growth, and job creation waiting to happen. Increasing the financial capability of the poor requires reimagining the way we measure risk. Thick file underwriting and documented character lending can improve a person’s credit score and his or her ability to get a loan. Thick file under writing documents bills insurance payments, rent payments, local lending accounts and other forms of credit that do not show up on a consumer credit report. Right now only Experian can raise your FICO Score by giving you credit for your phone and utility bills