THE CHALLENGE

Here's a staggering statistic: In 2018, 34% of residents in Athens, Georgia were living below the poverty line. Thirty-seven percent of Georgians lacked significant access to mainstream banking products. Only 50% of Georgia households have emergency savings in the past year, which may necessitate the need to borrow in an emergency.  Despite being employed, these workers, with earnings below the Federal Poverty Level, frequently find themselves trapped in a vicious cycle of poverty. To compound the difficulties, a very high percentage of our working poor are unbanked due to the inability to meet minimum financial institution qualifications, prior negative experiences with bank fees, and/or distrust of financial institutions.

As a result, these low-income families are often in crisis mode. Many use high-fee, prepaid debit cards for all transactions, limiting the ability to save. Others are forced to turn to predatory lenders, check cashing services, tax refund advances and rent-to-own purchases. A typical borrower could pay $800 or more for a short-term loan of $350. The disproportionately high cost of these products lessens the opportunity for upward mobility for low-wage workers. Such expensive debt repayments can sap much-needed income from any family, and low-income families are especially impacted.