The natural implication of the term “unbanked” or “underbanked” is the absence or underutilization of a bank. The assumption is that un- or underbanked people should become banked. While this will be true for some, I believe that a majority of the 60 million underbanked people in the US will…
Good Well
Where’s our next James Gutierrez (in NYT) or Patrice Peyret? Calling rock-star entrepreneurs who are determined to improve the lives of the underbanked. Our fund is a “double bottom line” venture fund. This means we execute against two goals: to make excellent financial returns and to demonstrate we’re investing in…
Goals, Inc
When thinking about how to improve the lives of the underbanked, many gravitate towards financial literacy. Sadly, most of it has proven ineffective. Others seek to make policy and regulatory changes. While this can yield meaningful scalable impact, there are often unintended consequences in our niche (e.g. capping interest rates…
The ol’ “Money In” Problem
Jack Dorsey just raised $100 million at a valuation of $1 billion for his new startup, Square, which allows smart phones to act as merchant credit card swipers. Western Union charges a pretty dime to accept cash and move it elsewhere. Green Dot’s reload network accounts for roughly one third of its…
Amex Enters Prepaid
“Loaded with Benefits. Not Fees” their online ads read. The bank and card network, which traditionally serves higher net worth and business clients, is moving downstream to reach to the underbanked mass market, they say, by introducing a general purpose reloadable prepaid card (GPR, in the jargon) last week. It’s…
And the Winner is…. GoalMine
Over 600 underbanked missionaries, mercenaries, bankers, regulators, entrepreneurs, investors CEOs and middle-managers descended upon New Orleans last week. Together, they represent the single most qualified and discriminating judge of what is hot and what is not in our sector. After watching live demonstrations and Twitter-guided Q&A with the finalists in our Core Underbanked…
Short-term loans you can TRUST
A couple weeks ago, I launched my one-man campaign to eradicate APR when it comes to short-term lending and proposed we replace it with TRUST. APR is bad because actually it doesn’t help the consumer, it provokes anger which informs regulations which causes the unintended consequences of even less availability…
Best Underbanked Forum Ever
The above is a synthesis of CFSI’s conference based on Twitter posts over the past couple days. Not nearly as amazing as the event, but a couple things strike me: “great” is the only very frequent word that’s not a basic descriptor of the event (like conference, consumer, financial). “CFPB”…
RIP APR
We all love to get piping mad about how terrible and predatory pay-day lenders are with rates – annual percentage rates (APR) – of 400%, 500% and up. It sounds unconscionable, doesn’t it? I believe APR is an inflammatory and completely ineffective way to evaluate or understand short-term loans. APR stifles innovation;…
Underbanked Inspire a Wealth of Services
My friend and colleague, founder and CEO of CFSI, Jennifer Tescher, writes a monthly column for the American Banker. This month it was on the Core Challenge (see my previous post), available here for those with a subscription. For those who don’t, here’s a long excerpt, and my encouragement to…