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Helping The Poor Trapped In Banking Deserts In The USA

Despite the claims of many politicians (and some economists), markets don't solve all problems, and many consumers are not just abused, but overlooked and ignored. There is a wonderful and inspiring article in Forbes magazine about how the dedicated and hardworking folks at Hope Enterprise Corporation, a community development financial institution, help the poor.

"HOPE serves black farmers in the south, though its customer base is much broader than that. Like Root Capital, HOPE was founded to address a fundamental market failure, and it has developed creative strategies to serve a rural population left behind by traditional banks."

Bill Bynum, the CEO of Hope, described the challenges and his organization:

"We work with a population that has not had the opportunity to participate in the formal banking system. Our region still suffers from a legacy of plantation agriculture, which relied on keeping people uninformed and dependent. The vestiges of this system persist today, leaving significant gaps, opportunity gaps... HOPE was started in the mid-90s by civic and business leaders who had seen years of effort to improve conditions in the delta, the most impoverished region in the U.S., produce little change... HOPE’s territory is akin to a developing country, a situation made worse by the dramatic expansion of bank deserts throughout the region. Eighteen hundred bank branches have closed since the recession and 93 percent of those are in low-income tracts. It’s happening across the country but it’s been particularly devastating to neighborhoods here in the Mid South... that leaves a lot of communities on the outside looking in, and vulnerable to predatory lenders and other abusive financial practices. Our region has always been under-banked and under-served by traditional institutions..."

Hope Enterprise Corporation works closes with the Hope Credit Union. I strongly encourage you to read the entire Forbes article. Another title for this article could have easily been, "What Hope Can Teach Others Seeking To Serve Bank Deserts In The USA."


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