Last week, Venture Lab Managing Director Paul Breloff, Center for Financial Inclusion Managing Director Beth Rhyne, and I attended the Financial Inclusion Forum at the U.S. Department of the Treasury (DOT). Hosted by the DOT and the U.S. Agency for International Development (USAID), the forum brought together representatives from around the world to discuss how to promote greater access to safe and affordable financial services.
The Forum’s speakers and guests demonstrate how important financial inclusion is to the world’s governments, businesses, and nonprofits. DOT Secretary Jacob Lew and Bill Gates delivered the opening remarks. Jamie Dimon, Chairman and CEO, JP Morgan Chase and Queen Máxima of the Netherlands, U.N. Secretary General’s Special Advocate for Inclusive Finance for Development spoke on a panel on “Financial Inclusion to Advance Global Growth and Equality”. Dan Schulman, the CEO of Paypal, spoke on a panel titled “Financial Inclusion: Financial Services Industry Perspectives”.
I travel around the world to speak about the importance of financial inclusion, and it was encouraging to see the U.S. Government, as well as so many other financial leaders, get together in one room to discuss how we can help the two billion people around the world who lack access to basic financial services finally access and use savings accounts, checking, insurance, and other financial services.
And make no mistake – this work is just as necessary here in the United States as it is in the foreign markets where Accion works. Nearly 45 million Americans have next to no credit history whatsoever. Almost half of all Americans say they can’t afford an unexpected $400 expense. And the millions of Americans who lack access to formal financial services typically pay up to 10 percent of their income just to use the money that they’ve earned.
These are problems that we can – and should address, both in the United States and abroad. Here are some of the ways that the Financial Inclusion Forum attendees are doing to promote inclusive finance:
- JPMorgan Chase & Co. announced the Catalyst Fund, a new initiative that will provide early-stage financial technology and service startups with funding and one-on-one mentoring. Accion Venture Lab will support the Fund and meet with the 20 or so selected startups to provide them with technical assistance. The fund will make a total of $2 million in small, flexible grants, as well as $1 million in in-kind advisory services to about 20 startups globally over the next two years.
- The Coca-Cola System announced details of a $1 million contribution to Operation HOPE to benefit women and girls living in the southeastern U.S. This contribution will fund the expansion and delivery of “Hope Inside,” an acclaimed financial literacy program.
- A third program involves a public-private partnership that would focus on bringing basic banking services to the Mississippi Delta, which Treasury described as “one of the most unbanked regions in the country.”
- Intuit announced it will educate over 30 million consumers on the importance of tax time savings, and encourage them to save for their retirement through a new myRA account.
- PayPal announced that it will increase the loan sizes available through PayPal Working Capital, expanding access to capital for small business entrepreneurs. Additionally, PayPal has initiated a partnership with Village Capital to sponsor events supporting entrepreneurs in the U.S. and Mexico in 2016.
- Fair Isaac Corporation (FICO) will work with 12 of the largest credit card companies to pilot FICO Score XD, which will use non-traditional data to identify creditworthy people who have previously been unlikely to have access to traditional credit.
- Department of Housing and Urban Development said it is partnering with a number of organizations and companies with a goal of developing systems that provide a credit history for more Americans.