4 ms·

Sounds like a business opportunity. While unlikely to be profitable. I'm sure you could get some donations to offer better financial services to the bottom per

Sounds like a business opportunity. While unlikely to be profitable. I'm sure you could get some donations to offer better financial services to the bottom percentages.

hkmurakami 9y ago
My understanding is that Walmart and Amex's bluebird program tried to make things a little bit better, but probably doesn't address all the fundamental structural issues in place
- Banthum 9y ago
  Is it a "structural" issue? Or is it just the fact that, statistically, poor people are really unlikely to pay back loans, so loaning to them profitably means charging really high interest? Or is that a "structural" issue?
  - thelock85 9y ago
    The profit model is to fleece the most reliable customers.
  - so33 9y ago
    Bluebird (mentioned by the parent) is a checking account alternative (read: not a real, FDIC-insured bank account). No one's loaning anything in this case. It's designed to appeal to people who, for one reason or another, cannot afford to open even a basic traditional checking account. Edit: Before such ersatz-bank-account services proliferated, I believe it was common for poor people to cash their paychecks at a check cashing place (which costs time and money).
ajmurmann 9y ago
This was covered in a recent episode of the a16z podcast: https://a16z.com/2017/12/24/democratizing-fintech-summit-2017/ https://a16z.com/2017/12/24/democratizing-fintech-summit-201...
jriot 9y ago
There is a good book on this topic by Muhammad Yunnus - Banker to the Poor: Micro-Lending and the Battle Against World Poverty, https://www.amazon.com/Banker-Poor-Micro-Lending-Against-Poverty/dp/1586481983/ref=sr_1_4?ie=UTF8&qid=1516946043&sr=8-4&keywords=muhammad+yunus https://www.amazon.com/Banker-Poor-Micro-Lending-Against-Pov.... Overall, it is difficult to be even stay in business let alone profitable due to structure of how interests work at that income level due to most not paying back on their loans.
- JBlue42 9y ago
  I thought the point of Yunus's book/movement was that microloans were safe because people, on the whole, DID pay back the loans?
  - jriot 9y ago
    If I remember correctly it was set up in Bangladesh. You are correct people did pay back the loans but it required much higher interest rates e.g., 60%, due to small size of the loans and having to factor in those who wouldn't pay back.

Sounds like a business opportunity. While unlikely to be profitable. I'm sure you could get some donations to offer better financial services to the bottom percentages.

hkmurakami 9y ago

My understanding is that Walmart and Amex's bluebird program tried to make things a little bit better, but probably doesn't address all the fundamental structural issues in place

Banthum 9y ago
Is it a "structural" issue? Or is it just the fact that, statistically, poor people are really unlikely to pay back loans, so loaning to them profitably means charging really high interest? Or is that a "structural" issue?
- thelock85 9y ago
  The profit model is to fleece the most reliable customers.
- so33 9y ago
  Bluebird (mentioned by the parent) is a checking account alternative (read: not a real, FDIC-insured bank account). No one's loaning anything in this case. It's designed to appeal to people who, for one reason or another, cannot afford to open even a basic traditional checking account. Edit: Before such ersatz-bank-account services proliferated, I believe it was common for poor people to cash their paychecks at a check cashing place (which costs time and money).

ajmurmann 9y ago

This was covered in a recent episode of the a16z podcast: https://a16z.com/2017/12/24/democratizing-fintech-summit-2017/ https://a16z.com/2017/12/24/democratizing-fintech-summit-201...

jriot 9y ago

There is a good book on this topic by Muhammad Yunnus - Banker to the Poor: Micro-Lending and the Battle Against World Poverty, https://www.amazon.com/Banker-Poor-Micro-Lending-Against-Poverty/dp/1586481983/ref=sr_1_4?ie=UTF8&qid=1516946043&sr=8-4&keywords=muhammad+yunus https://www.amazon.com/Banker-Poor-Micro-Lending-Against-Pov.... Overall, it is difficult to be even stay in business let alone profitable due to structure of how interests work at that income level due to most not paying back on their loans.

JBlue42 9y ago
I thought the point of Yunus's book/movement was that microloans were safe because people, on the whole, DID pay back the loans?
- jriot 9y ago
  If I remember correctly it was set up in Bangladesh. You are correct people did pay back the loans but it required much higher interest rates e.g., 60%, due to small size of the loans and having to factor in those who wouldn't pay back.