By Financial Health Network Consulting
Putting Low-Income Consumers First With the Help of Financial Health Network’s Knowledge
More than 68 million low-income Americans don’t get the financial services they need. It’s this market gap that prompted the Opportunity Finance Network (OFN), a network of community development financial institutions to turn to the Center for Financial Services Innovation (Financial Health Network) last year.
For the past decade, OFN has partnered with Wells Fargo and other partners to host the NEXT Awards, which recognizes the NEXT generation of community development financial institutions (CDFIs) and helps them achieve impact and scale in their communities. In 2015, OFN realized the massive impact they could have by turning the focus of the awards to consumer financial services. “We want to make sure CDFIs are helping combat issues like predatory lending,” says Beth Lipson, executive vice president of strategic initiatives at OFN. “We wanted to elevate some of the CDFI strategies in consumer finance.”
Understanding the Needs of Low-Income Consumers
That’s precisely where Financial Health Network came in. Given its unequivocal understanding of the struggles, habits, and behaviors involved in consumer finance, Financial Health Network contributed a deep wealth of information on what successful products in the marketplace look like.
With Financial Health Network’s help, OFN created a set of criteria to help identify leading edge consumer finance strategies. OFN then put together an internal review and selection committee with experts across consumer finance including Financial Health Network President and CEO Jennifer Tescher.
Leading Businesses That Empower Consumers Across the Country
The six winners of the 2015 NEXT Awards reflect this increased understanding of the depth and breadth of low-income consumer needs. The group includes Sunrise Banks which won for their strategy to expand employer based small-dollar loans, and Freedom First Federal Credit Union which won for their strategy to expand their workforce development loan product.
Thanks to Financial Health Network, OFN was able to grasp and address the broad range of needs and behaviors of low-income consumers and to award a diverse group of CDFI Awardees. Working with Financial Health Network also set the groundwork for another award year in 2016 that will again focus on consumer financial products. “There’s a lot of activity happening in the market right now,” says Lipson. “There is a momentum to build in this area and Financial Health Network has the context for what’s going on in the market.”