Paper

A Financial Services Survey of Low- and Moderate-income Households

Attitude and behavior of low income customers towards financial services
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This paper discusses the results of a survey of the financial behavior and attitudes of low and moderate-income consumers of financial services. It compares the demographic factors of the banked and the unbanked population, including:

  • Race/ethnicity;
  • Education level;
  • Income.

The paper delves into the following reasons for people not having checking account or savings account:

  • Cost;
  • Hard barriers including:
    • Not having proper identification;
    • Bad credit.
  • Soft barriers including:
    • Feeling of not treated with respect;
    • Not trusting banks.
  • Convenience.

The paper explores the frequency of saving and places/locations for saving, and investigates reasons for saving. It then presents the results of the survey:

  • Low income population is less banked than the general public;
  • This population uses both banks or credit unions and alternative financial institutions and systems;
  • High correlation exists between saving and multiple forms of asset building.

The paper concludes with the following findings from the survey that:

  • Regarding the banked and unbanked as a dichotomy is a serious mistake;
  • Understanding the informal portions of the financial network in these communities is important;
  • Low income population is quite debt-averse;
  • Low- and moderate-income families can save.

About this Publication

By Seidman, E., Hababou, M. & Kramer, J.
Published