ATLANTA -
In a study titled "Marketing Credit To Low-Income Households," it found that one-third of such households have used a branch inside some type of retail establishment. The study identified low-income as those earning less than $40,000 annually.
In addition to the three-in-10 who have used a grocery store or supermarket branch, one-tenth who have used a branch in a department or discount store, and one in 20 who have used a branch in some other type of retail location. Almost half of the low-income respondents who use in-store branches say this is their primary branch, according to the study. Although an equal proportion of those with income of $40K+ use in-store branches, less than one-quarter of these higher-income consumers say that an in-store branch is their primary branch, SYNERGISTICS added.
Those who indicated using an in-store branch were further asked if they have ever applied for a loan or other credit service at an in-store branch. Close to one-fifth of the low- income households who use in-store branches have applied for credit at this type of facility. One-tenth of the users with income of $40K+ have done so.
"In-store bank branches are an established element of the branching system and have significant relevance to many under-banked households," said William McCracken, CEO of SYNERGISTIC. "In-store branches represent a very effective channel for financial institutions to deliver credit and other financial services to the low-income market. Offering credit and loan services is an important next step in broadening relationships with this market. Currently, the possible competitive threat of a major retail chain - such as Wal-Mart or Home Depot - having the ability to operate their own bank inside their stores is being held at bay by legislators. In addition, Kroger recently introduced Kroger Personal Finance through which customers can apply for mortgages, home equity credit, identity-theft protection, pet insurance, or a credit card. Financial institutions with an interest in serving the low income market via this channel should take steps to strengthen their retailer alliances and bolster this valuable conduit."
For more information: www.synergisticsresearch.com.
