attracting lower-income individuals to banking services

[Community Development Banking List]

Original message from: ejdodson@comcast.net

With good reason, a significant segment of the population does not trust
banking institutions. Research based on focus groups reveals that this level
of distrust extends even to professionals who also happen to be members of
our minority ethnic groups. Minorities and lower-income individuals
generally have more negative experiences with our banking institutions and
are, therefore, far more likely to make use of check cashing services and
pay-day lending companies, where anonymity and immediate access to cash or
credit are selling points - even though the cost of these services is
excessive.



At least one large regional bank I am familiar with decided to take on these
high cost competitors by establishing small, storefront bank branches in the
neighborhoods where traditional bank branches had proved intimidating to the
neighborhood residents. Their business model for these storefront branches
permitted the bank to offer a range of services in a manner accepted by the
targeted customer base, with minimum investment in "bricks and mortar" and
staffing.



Last I heard, this particular bank had plans to double the number of these
storefront branches throughout its footprint.



What I do not know is the extent to which the bank has established
sufficient trust with these customers to convince them to utilize additional
products and services.



Ed Dodson

[Community Development Banking List]

Original message from: bdodson95@aol.com


This idea has great merit.Â* Many of our urban neighborhoods have little or no retail services.Â* Banks hhav e retreated to the suburbs and look at their urban branches as losing propositions.Â* This is the plight of the unbanked.Â* I have been trying to persuade a local bank to open siuch a branch in an area that has seen significant new development:Â* we have co-developed 4 affordable housing communities;over 5000 additional rental and single family units have been built.; and 3 major comercial developments are in the immediate areaÂ* The bank in question pit an ATM in the ccmmunity as part of an unbanked project thru the IRS.Â* It's in the top five of all their ATMs!Â* I serve on their Community Advisory Forum and have not been able to persuade them.Â* They can't tell me what it takes for them to commit.Â* We have offered to build it for them.





William A. Dodson Jr.
Exec. Director
Dayspring Christian CDC
PO Box 247198
2100 Agler Road
Columbus, OH 43224

614 296-0042 Cell
614-471-0816 Office
614-471-7665 Fax






-----Original Message-----
From: Edward Dodson <ejdodson@comcast.net>
To: communitydevelopmentbanking-l@cornell.edu
Sent: Mon, Jul 27, 2009 9:57 am
Subject: attracting lower-income individuals to banking services






















With good reason, a significant segment of the population
does not trust banking institutions. Research based on focus groups reveals
that this level of distrust extends even to professionals who20also happen to be
members of our minority ethnic groups. Minorities and lower-income individuals
generally have more negative experiences with our banking institutions and are,
therefore, far more likely to make use of check cashing services and pay-day
lending companies, where anonymity and immediate access to cash or credit are
selling points – even though the cost of these services is excessive.



Â*



At least one large regional bank I am familiar with decided
to take on these high cost competitors by establishing small, storefront bank
branches in the neighborhoods where traditional bank branches had proved
intimidating to the neighborhood residents. Their business model for these
storefront branches permitted the bank to offer a range of services in a manner
accepted by the targeted customer base, with minimum investment in “bricks
and mortar� and staffing.



Â*



Last I heard, this particular bank had plans to double the
number of these storefront branches throughout its footprint.



Â*



What I do not know is the extent to which the bank has established
sufficient trust with these customers to convince them to utilize additional
products and services.



Â*



Ed Dodson



Â*










CDB list instructions http://www.runonthebank.net/cdblist.htm ('http://www.runonthebank.net/cdblist.htm')

[Community Development Banking List]

Original message from: Veronika.Thiel@neweconomics.org

Adding a bit of UK perspective here - we're trying to get banks back
into communities as well. Britain already has one of the lowest branch
density in Europe (as in number of branches per m population), and the
current banking crisis with ensuing mergers will see no doubt a further
round of closures. Needless to say that closures are disproportionately
high in poorer areas. Hence, I'd be quite interested in hearing more
about this low-cost approach. Are they situated within existing retail
shops? And are they staffed by bank employees? The latter question
relates to the rise of branchless banking in developing countries. There
is as of yet no evidence that people use banking services at retail
agents other than to withdraw cash (I have some CGAP research on this if
anyone is interested), echoing Ed's point that there is no knowledge on
product uptake...

Ed, I would be grateful for any further info/links zou might have!

Thanks and best,

Veronika





________________________________

From: bounce-4129788-9339634@list.cornell.edu
[mailto:bounce-4129788-9339634@list.cornell.edu] On Behalf Of Edward
Dodson
Sent: 27 July 2009 14:58
To: communitydevelopmentbanking-l@cornell.edu
Subject: attracting lower-income individuals to banking services



With good reason, a significant segment of the population does not trust
banking institutions. Research based on focus groups reveals that this
level of distrust extends even to professionals who also happen to be
members of our minority ethnic groups. Minorities and lower-income
individuals generally have more negative experiences with our banking
institutions and are, therefore, far more likely to make use of check
cashing services and pay-day lending companies, where anonymity and
immediate access to cash or credit are selling points - even though the
cost of these services is excessive.



At least one large regional bank I am familiar with decided to take on
these high cost competitors by establishing small, storefront bank
branches in the neighborhoods where traditional bank branches had proved
intimidating to the neighborhood residents. Their business model for
these storefront branches permitted the bank to offer a range of
services in a manner accepted by the targeted customer base, with
minimum investment in "bricks and mortar" and staffing.



Last I heard, this particular bank had plans to double the number of
these storefront branches throughout its footprint.



What I do not know is the extent to which the bank has established
sufficient trust with these customers to convince them to utilize
additional products and services.



Ed Dodson





CDB list instructions http://www.runonthebank.net/cdblist.htm ('http://www.runonthebank.net/cdblist.htm')


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[Community Development Banking List]

Original message from: Elisabeth_Geller@vancity.com

Hello all:
Given interest in this area, you may want to read Prof. Jerry Buckland's case study report on Financial Inclusion and Low Income Canadians. It can be found on our website (at the bottom of the page) at https://www.vancity.com/MyCommunity/Library/FacingPoverty/

We have been involved since 2004 in creating and operating a branch of our credit union in Vancouver's downtown eastside - often called the poorest urban neighbourhood in Canada. Pigeon Park Savings is featured in the article above - I'm also happy to answer any questions about it.

Regards,
~E



Elisabeth J. Geller, MA
Manager, Community Leadership
Social Finance Division
Vancity and Citizens Bank of Canada

540-815 W. Hastings St.
Vancouver, BC, Canada V6C 1B4
T. 604 877 7402 F. 604 877 7992
vancity.com
citizensbank.ca

Help fight poverty! Check out our Jumpstart Account...

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From: bounce-4132548-4991314@list.cornell.edu [mailto:bounce-4132548-4991314@list.cornell.edu] On Behalf Of Veronika Thiel
Sent: Thursday, July 30, 2009 2:22 AM
To: communitydevelopmentbanking-l@cornell.edu
Subject: RE: attracting lower-income individuals to banking services

Adding a bit of UK perspective here - we're trying to get banks back into communities as well. Britain already has one of the lowest branch density in Europe (as in number of branches per m population), and the current banking crisis with ensuing mergers will see no doubt a further round of closures. Needless to say that closures are disproportionately high in poorer areas. Hence, I'd be quite interested in hearing more about this low-cost approach. Are they situated within existing retail shops? And are they staffed by bank employees? The latter question relates to the rise of branchless banking in developing countries. There is as of yet no evidence that people use banking services at retail agents other than to withdraw cash (I have some CGAP research on this if anyone is interested), echoing Ed's point that there is no knowledge on product uptake...
Ed, I would be grateful for any further info/links zou might have!
Thanks and best,
Veronika


________________________________
From: bounce-4129788-9339634@list.cornell.edu [mailto:bounce-4129788-9339634@list.cornell.edu] On Behalf Of Edward Dodson
Sent: 27 July 2009 14:58
To: communitydevelopmentbanking-l@cornell.edu
Subject: attracting lower-income individuals to banking services

With good reason, a significant segment of the population does not trust banking institutions. Research based on focus groups reveals that this level of distrust extends even to professionals who also happen to be members of our minority ethnic groups. Minorities and lower-income individuals generally have more negative experiences with our banking institutions and are, therefore, far more likely to make use of check cashing services and pay-day lending companies, where anonymity and immediate access to cash or credit are selling points - even though the cost of these services is excessive.

At least one large regional bank I am familiar with decided to take on these high cost competitors by establishing small, storefront bank branches in the neighborhoods where traditional bank branches had proved intimidating to the neighborhood residents. Their business model for these storefront branches permitted the bank to offer a range of services in a manner accepted by the targeted customer base, with minimum investment in "bricks and mortar" and staffing.

Last I heard, this particular bank had plans to double the number of these storefront branches throughout its footprint.

What I do not know is the extent to which the bank has established sufficient trust with these customers to convince them to utilize additional products and services.

Ed Dodson



CDB list instructions http://www.runonthebank.net/cdblist.htm ('http://www.runonthebank.net/cdblist.htm')

__________________________________________________ ____________________
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__________________________________________________ ____________________

DISCLAIMER: This e-mail is confidential and should not be used by anyone who is not the original intended recipient. If you have received this e-mail in error please inform the sender and delete it from your mailbox or any other storage mechanism.

Nef does not accept liability for any statements made which are clearly the sender's own and not expressly made on behalf of nef.

Please note that nef does not accept any responsibility for viruses that may be contained in this e-mail or its attachments and it is your responsibility to scan the e-mail and attachments (if any).
__________________________________________________ ____________________
This email has been scanned by the MessageLabs Email Security System.
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