Monday, May 13, 2013

Understanding the Underbanked

"No sign" over bank cards in the shape of a house.

Atlanta-based FactorTrust is partnering with FICO, the credit scoring folks, to produce a new quarterly report on underbanked Americans  in hopes that it will lead to more and better credit decisions for the financially underserved.

FactorTrust collects and analyzes non-traditional data sources (e.g. prepaid debit card usage and social media) to help lenders assess the risk of lending to consumers who have thin credit files, or none at all. The FactorTrust Underbanked Index uses a variety of data sources and more than 100 million distinct transaction records covering all phases of the consumer credit life cycle, with real-time updates.The first quarterly report is due out this month.

"The demand for alternative financial services continues to grow as consumers look for instant, efficient and secure products that they haven't been able to get from traditional lenders," said Greg Rable, CEO at FactorTrust.

G20 Financial Inclusion Indicators

This is not just a U.S. problem. Worldwide, but especially in developing countries, financial inclusion has been an elusive goal.

Now a group of organizations affiliated with the World Bank has launched a Web site dedicated to Financial Inclusion Indicators. Endorsed by G20 leaders, the Web site is interactive and features basic data on financial inclusion in 192 countries.

The aim is to help countries get a handle on how well financial inclusion initiatives are doing in terms of access and usage. "Over time, new indicators that provide deeper coverage of all financial services and various delivery channels as well as measure of quality will be developed so as to provide a more complete picture of financial inclusion," the group said in a statement.

The Global Partnership for Financial Inclusion is behind the initiative; it's member roster includes CGAP (the Consultative Group to Assist the Poor) and the International Finance Corporation (IFC); both are affiliated with the World Bank.

You can learn more about the Financial Inclusion Indicators at the Partnership's Web site.

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