Greenville Business Magazine
By Tammie Hoy Hawkins
CEO, CommunityWorks
It is no surprise that there is a large part of the population that does not have strong relationships with traditional financial institutions (banks or credit unions). Look no further than the recent Covid-19 relief program, the Paycheck Protection Program (PPP), where story after story pointed to business owners, particularly minority businesses, unable to access the PPP because they did not have strong banking relationships.
Even before the pandemic, low-income communities and individuals have experienced disproportionate access to traditional financial products. In South Carolina, 26.1 percent of the population is considered unbanked or underbanked, despite a large need for credit or financing (Prosperity Now SC Scorecard).
Alternative lenders and finance companies, like payday lenders, auto title loan companies, buy-here pay-here lots, and check cashing places are common options for individuals with poor credit, no credit, or lack of a traditional banking relationship.