up:: Content
author:: Aspen Institute
full title:: Can We Increase Financial Inclusion Through Nonprofit-Powered Fintech?
url: Link
Highlights
- A car title loan cost 15 to 20 times more than credit cards
- Payday loans cost American families $3.4 billion in fees every year.
- More than two-thirds of the fees paid — $2.6 billion — is a direct result of churning borrowers into loan after unaffordable loan.
- JPMorgan Chase Institute found that over a four year period, 55% of its customers regularly experiences more than a 30% swing in income from one month to the next. In this context, the ability to save and borrow to manage variations in income becomes even more essential to the financial stability of American families. And financial products and services are key tools for saving and borrowing.
- But will private investment and for-profit financial technology firms alone reach the millions of Americans that don’t have access to responsible and affordable financial services?
- We have earned the trust of underserved communities.
- We understand these consumers and families and have generated valuable data about them.
- We can pursue opportunities that are riskier in financial terms than for-profit enterprises.
- We can be patient and incubate ideas over longer periods of time.
- We can attack systemic problems.
- We can aim to create and scale public goods, not just returns for our organizations.
- Philanthropic capital is precious, and must be deployed as thoughtfully and with as much impact as possible. nLIFT is a critical forum to ask and answer tough questions about how best to do this, both for ourselves and on behalf of a broader field.