financial services

Today the city of Los Angeles made its second attempt to bring under-banked and unbanked Angelenos to the financial mainstream. Two months after Mayor Villaraigosa launched Bank on LA, City Councilmember Richard Alarcón launched the Banking Development Districts (BDDs) Initiative. Los Angeles has recognized the need for placing affordable financial services at the hands of its people and is taking major steps toward eliminating dependency on fringe financial institutions.

 While 1.5 million households are unbanked state-wide, Los Angeles has the third highest percentage of unbanked households nation-wide. For the Angelenos who do not have a simple checking or savings account, BBDs are a promising way to gain access to the appropriate financial services and products necessary to get connected to savings and asset building. Research shows that a full time worker conducting business with non-traditional financial institutions can pay tens of thousands of dollars in fees in a life time. This is a chunk of money large enough to start a small business, send a child to college, build a retirement or put a down-payment on a house.

On April 29^th, the Global Assets Project hosted an event to launch its newest policy brief, "Savings-Linked Conditional Cash Transfers: A New Policy Approach to Global Poverty Reduction," at the New America Foundation. By request, we have created a 10 minute Podcast summarizing the paper and key points from the event, for those unable to attend the two-hour event or watch or listen to it in its entirety on our website or YouTube. 

Just days before the New America Foundation released its Global Assets Project policy brief, "Savings-Linked Conditional Cash Transfers: A New Approach to Global Poverty Reduction," the Colombian announces a major effort to do just that - link the beneficiaries of its nationwide CCT program with savings accounts.  This major policy development in Colombia has emerged in part as a result of the efforts of the policy brief's co-author Yves Moury (Executive Director of Fundación Capital), and his project, Proyecto Capital. Our brief, released today, advocates using the (typically) massive CCT infrastructure to formally bank the largely unbanked poor populations in developing countries. But we also advocate going one step further: use the power of CCTs to encourage saving and asset accumulation of the poor.

E-mail, the internet, mobile phones, and microfinance.  At first glance, you might think I'm playing Sesame Street's "Three of these things belong together" game.  But I assure you that, despite my love for the Cookie Monster, I'm not.  It turns out that these four innovations, along with 26 others, have been named the Top 30 Innovations of the Last 30 Years by PBS's Nightly Business Report.

To some, lumping microfinance-- a relatively new concept to much of the world's inhabitants, especially after Muhammed Yunus and his Grameen Bank won the Nobel Peace Prize in 2006-- with such staples of our modern life might seem puzzling.