Over 25 million people in the U.S. are unbanked, and another 67 million people are underbanked, meaning they are without an account at a bank or other financial institution, often because they lack the minimum balance to open checking and savings accounts. Many consumers who fall into this category are educated, middle-income families.
Traditional sources of credit are generally not an option for these consumers. The small dollar short-term loan products provided by tribes is helping millions of these Americans who are unable to access credit from conventional financial institutions, but need quick access in order to meet urgent financial situations.
According to the Center for Financial Services Innovation, "Having the ability to borrow relatively small sums, on reasonable terms, can help individuals weather a financial shock, smooth income fluctuations, build a positive credit history, and facilitate a wealth-building purchase."
EXCERPTS FROM AN UNLIKELY SOLUTION:
24.9% OF AMERICAN HOUSEHOLDS USE ALTERNATIVE FINANCIAL SERVICES.
[2013 FDIC National Survey of Unbanked and Underbanked Households, Federal Deposit Insurance Corporation, 10/2014]
38 million Americans are living paycheck-to-paycheck
[Greg Kaplan, Giovanni Violante and Justin Weidner, “The Wealthy Hand-to-Mouth,” The Brookings Institution, 3/20/2014]
Nearly 93 million Americans are unbanked or underbanked