The FINANCIAL -- SAN FRANCISCO -- A collaboration between Visa Inc., Filene Research Institute and the Ford Foundation aimed at strengthening access to financial services reached 18,000 underbanked households over the past 18 months.
The effort, called the “Reaching Minority Households Incubator” program, worked with 40 credit unions across the U.S. and Canada to test financial products and services designed to address the needs of minority communities.
During the 18-month testing period, the incubator program issued more than 58,000 loans totaling more than $80 million.
The incubator program focused on solving specific challenges facing minority households. Products tested included immigrant lending, small business lending, auto refinance and payday loan alternatives. In the U.S., an estimated 51 million people are underbanked, including nearly 50 percent of African-American and Hispanic households, according to the Federal Deposit Insurance Corporation, according to VISA.
“Meeting the needs of financially vulnerable populations and pursuing financial stability do not have to be mutually exclusive pursuits,” said George Hofheimer, chief knowledge officer at Filene Research Institute. “Financial institutions are at the front lines of changing the disparity in access to basic financial services for African-American and Hispanic households. Providing products like those tested in the incubator program can be a win-win-win for the customer, financial institution and community.”
Visa contributed $1.2 million to the incubator program to identify industry best practices and programs that effectively serve minority customers and then scale those successful programs in relevant communities. Visa also helped guide the program design, recruit testing institutions and promote lessons learned across its network of partners.
A report released today reveals the outcomes of the Reaching Minority Households Incubator. The report assessed the scalability, sustainability and customer impact for each product, including the specific impact for minority households. About 96 percent of minority respondents indicated they would use the products in the incubator again, and about 94 percent recommended the products to family and friends, the report indicated.