What do we know about the Unbanked

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• What do we know about the Unbanked?
• Janneke Ratcliffe
• UNC Center for Community Capital
• August 21, 2008

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Definitions

• Unbanked Currently have no bank account.
• Underbanked Currently have a checking or savings
  account, but relies on non-bank financial
  services.
• 40 million US Households (CFSI)

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Profile of Unbanked, disproportionately
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Profile (cont.)
From Center for Financial Services Innovation
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Unbanked Underbanked in NC (2000 NC Financial
Services Survey)

• Among lower-income families
• 17 no bank account (222,000 households)
• 6 savings account only 31 checking account
  only
• 46 had both
• 41 of unbanked families were previously banked
• Factors associated with greater likelihood of
  being unbanked
• Lower income
• African-American and Hispanic
• Lower education levels
• Fewer bank branches, more check cashing outlets
  in zip code
• Grew up in unbanked household
• Most important reasons for not being banked
• 49 - too costly
• 32 - dont need it
• difficult to use, privacy, location/hours,
  language, comfort lt 5 each

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A fragmented market with many Sub-segments, with
different motivations, barriers, attitudes
usage patterns

• Making it (5)
• Nearing Success (11)
• Working their Way
• Young Families (8)
• Core Customers (8)
• Older Natives
• Older Margin (18)
• Older Core (7)
• Immigrants
• New Latinos (9)
• Settled In (14)
• Struggling
• Never Banked Natives (7)
• Formerly Banked (14)

From CFSI, survey of low- moderate- income
neighborhoods in three urban markets
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The Credit Path the theory
From Alternatives Federal Credit Union
The reality is very different, with many getting
mired in consumer debt before starting to save
and build good credit.
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Debt has supplanted savings among lower income
groups.
From Survey of Consumer Finance Analysis by CCC
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Resources

• The Center for Financial Services Innovation
  (CFSI)
• http//www.cfsinnovation.com/
• Alternatives Federal Credit Union Aspen
  Institute the Credit Path
• http//www.aspeninstitute.org/site/c.huLWJeMRKpH/b
  .2455441/k.9137/Credit_Path.htm
• The UNC Center for Community Capital
• www.ccc.unc.edu/919-843-2140