CGF Blog
Banking on America
Friday, August 21, 2009
Authored by Nabeel Gillani
According to a recent story by the AP, nearly 10,000 new bank branches were opened throughout the U.S. in the past five years (1). However, only 1 out of every 10 of these branches was opened in an inner city neighborhood. Instead of focusing on low-income neighborhoods, most banks gravitate towards middle to high-income areas, undoubtedly because they assume the risk of banking to higher income individuals is significantly less. At the same time, when banks do offer their services to lower-income customers, they tend to charge them the most for overdraft and other fees. In fact, in 2008 banks made a record $38.5 billion from overdraft fees, however “the most cash-strapped customers are the hardest hit by such fees, with 90 per cent of overdraft revenues coming from 10 per cent of the 130m checking accounts in the US.” (2) Given a paradigm in which lower-income populations lack access to the benefits of the banking system—and even when they do gain that access, they face high fees—it isn’t surprising that these population mistrust the banking sector. The result is a system that effectively shuts out millions of Americans from accessing mainstream financial services—and inhibits many more from taking the steps they need to raise their standards of living.
Posted by Nabeel on 08/21 at 11:34 AM
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Reducing “The High Cost of Being Poor”
Saturday, August 15, 2009
Authored by Andy Posner
Here’s a simple dilemma that plagues many American families: how does someone that lives from paycheck to paycheck and is without a credit score—and therefore without a credit card—afford to cover unexpected expenses between paychecks, such as fixing a flat tire, a doctor’s visit, or even regular expenses such as groceries and phone bills? For higher-income families, this simply is not a problem. For one thing, consider how often you use a credit card to make purchases; doing so enables you to delay paying for the item until you have received your paycheck and can afford it. And of course, being higher-income by definition means that one can most likely already afford most expenses that occur between paychecks. But in the case of lower and moderate-income families, a lack of access to credit combined with a lack of savings forces them to so-called payday lenders to make ends meet during the week
Posted by Administrator on 08/15 at 01:23 PM
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Partnerships Through a Market-Based Approach
Friday, August 07, 2009
Authoredy by Haley Jordahl
Throughout the past decade, market-based approaches have emerged as important components of any program attempting to ameliorate domestic or international poverty at the household level. These solutions come in all shapes and sizes, from micro-loans to enhanced market linkages for small-scale enterprises; however, advocates of a market-based approach to development generally view market integration as a key building block of economic opportunity, and therefore a primary factor in the eradication of poverty.
Posted by Nabeel on 08/07 at 09:53 AM
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