Micro Branch, Macro Payoff

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MIAMI-As part of its strategy for reaching out to the un- and underbanked, Self Help FCU has opened a "micro branch" in east San Jose, Calif.

The micro branch "was designed, from beginning to end, with the un- and underbanked consumer in mind," all the way down to location, the specific products offered and the general atmosphere of the facility, said micro branch director Haydee Moreno, speaking during a presentation at the Best Practices in Retail Financial Services symposium held here.

While the Durhamn, N.C.-based CU has been a community development financial institution for 30 years, it only opened its doors in California in 2006 as part of an expansion fueled through merging in failing credit unions.

It launched the micro branch in 2010. Self Help also has facilities in its home state and Washington, D.C.

Open To Non-Members, Too

The micro branch offers consumers-even those who aren't SHFCU members-a variety of transaction services with no account necessary, including personal, home and auto loans, check-cashing, deposit-based accounts and more. Payday loans are not offered, and the institution does charge account and transaction fees.

The storefront-open seven days per week-is located in a strip mall in a highly trafficked area, and sits between a 7-Eleven and a liquor store. While some of the exterior signage was originally created to look similar to traditional FIs, it has since made a move to neon signs.

"When you're on the street, we look approachable enough...but when you walk inside it's clear to you that this is different," said Moreno.

Statement on the Wall

For starters, the institution's mission statement is written on the wall and all of the products and services offered are listed clearly alongside their cost, similar to a restaurant menu. Additionally, much of the signage and marketing materials are written in both English and Spanish, due to the high population of Latino immigrant families in the area.

"We needed to recognize that even if we really don't want to be intimidating, we are," said Moreno.

Many aspects of the branch's services are designed around recognizing the target market's jitters over doing business with a traditional financial institution, and then alleviating those fears. For example, when a government-issued photo ID is required, it doesn't necessarily have to come from the United States. Because of that, "we can serve about nine out of 10 people that walk in the door," said Moreno.

Moreno said that the micro branch was still a work in progress, and that converting consumers from check-cashers into checking account-holders had been harder than expected.

"If you walk in the door and want a savings account, we have those," said Moreno. "If you want a money order, we have those. If you want check-cashing, we have that."

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