Makes you think…
From the Economist:
In America at least 12m households have no bank account—are “unbanked”, in the industry’s ugly jargon. Once unnaturalised immigrants and the “underbanked”—an even uglier term for those with a low credit score or none—are added, some estimates exceed 40m.
I wonder how many of these people have a cell-phone? (Among those that did, it would also be interesting to know the breakdown between contracts and pre-pay accounts.)
You don’t have to go to Africa or the Indian sub-continent to identify a large and underserved market in financial services. Heretofore the problem has been that the cost of customer acquisition and maintenance has been higher than the expected revenues and so these markets lay fallow (or were priced - from the consumers’ point of view - prohibitively expensively:)
All of this is good news for the unbanked, who often use expensive “alternative financial providers” to pay bills, cash cheques and borrow. For instance, payday lenders, which provide short-term (usually two-week) loans, often charge interest rates that top 470% when annualised—no small sum when you are living from one pay cheque to the next. Worse, those without bank accounts find it hard to save, build credit histories and obtain loans at reasonable rates. A study published this week by the Federal Reserve Bank of Chicago and the Brookings Institution reports that cities with higher shares of “banked” residents tend to have higher rates of income, employment and homeownership, and lower crime rates.
