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USFD and "Financial Inclusion"

Blog Image by Julie Siwicki of the Financial Access Initiative

“Financial Inclusion” has been a long-standing goal in development policy circles, borne at least in part out of the microfinance revolution. Belatedly, wealthier countries like the United States have caught on to the need to pay attention to whether households are included in the formal financial system. But a shared and precise definition of what it means to be included, or excluded, remains difficult to come by.

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IBT: Wireless Carriers Offer ‘Bad Credit’ Phone Plans to Riskier Customers

Blog Image by U.S. Financial Diaries

The International Business Times featured USFD data as part of a larger piece on new wireless plans for customers with poor credit history.   Earlier this week, launched a new service that allows users with bad credit to sign up for a 2-year contract if they've paid their bills on time for 12 consecutive months. 

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Getting Through a Tough Year

Blog Image by U.S. Financial Diaries

Each of the U.S. Financial Diaries' Household Profiles presents the financial life of one family in the USFD study. While these families are not necessarily representative of the total sample, they illustrate recurring themes: households struggling with income volatility, unplanned expenses, and finding ways to save and invest, but also using creative–and sometimes counter intuitive–budget and money management strategies to help make ends meet...

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NYT: In Lending Circles, a Roundabout Way to a Higher Credit Score

Blog Image by U.S. Financial Diaries

Earlier this week, The New York Times published a feature on new initiatives aimed at bringing informal savings groups into the formal financial sector:

While informal lending circles among families, acquaintances, co-workers and neighbors are familiar to hundreds of millions of people all over the globe, they are rarely recognized by mainstream financial institutions.

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New Report on "Invisible Finance"

Blog Image by U.S. Financial Diaries

People run their financial lives with a variety of tools. The first tools that come to mind are likely to be formal, like checking accounts and credit cards. But households often use informal tools that are harder to see from outside, like short-term loans from friends or relatives. Some people use informal financial services because they lack access—or believe they lack access—to quality products or because they do not trust formal options...

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Not For Free

Blog Image by Timothy Ogden of the Financial Access Initiative

Two weeks ago I attended a Payments Bootcamp put on by Glenbrook Partners (a 2-day class they hold several times a year) to learn more about how the payments industry works behind the scenes. There is a lot to learn. Two days allows more than just scratching the surface, but not much more. While the class is focused on the payments infrastructure in the United States particularly, the material illuminates the evolution of mobile money and digital payments in the developing world...

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Overdraft as a Product, not a Penalty?

Blog Image by Julie Siwicki of the Financial Access Initiative

The Taylors overdraft their checking account every two weeks, on purpose.

As described in a recent issue brief published by the U.S. Financial Diaries, the Taylor family’s income level varies significantly from month to month. Sometimes it’s not enough to cover all of their expenses. So, they opened an account at a bank with a simple overdraft fee structure: One $35 charge per overdraft, no daily fees, and an allowance of up to $500 at a time. Since the Taylors typically make only one large cash withdrawal per paycheck – the entire amount of pay – this bank would charge them at most one $35 overdraft fee each cycle, if they happen to need more cash than the amount of that week’s direct deposit...

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"Microcredit for Americans" - Is it all about the Score?

Blog Image by Jonathan Morduch of the Financial Access Initiative

Buried at the bottom of Shaila Dewan's recent New York Times article on "Microcredit for Americans" is an idea that deserves much more attention:

"Grameen helps its clients in another way that many experts say is more important than increasing income — it establishes good credit scores. Many poverty alleviation groups have shifted their focus from saving to credit building, because people with poor or no credit must leave large deposits for basic needs like utilities, have trouble renting decent housing, pay much higher interest rates and have a harder time finding jobs...
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