Inner City Banking - The motivation

It’s surprisingly expensive to be poor. Being poor usually means living in areas that have significantly higher crime than upper middle class suburbs. That means that you’re at a higher risk of being robbed (which is expensive because you then have to replace what was stolen). Another expense of being poor is not having a bank. The first effect of not having a bank is that you need to use a check cashing store to get your money. Check cashing stores usually take a cut of about 3% of the amount of the check. The next problem with not having a bank is that the inability to use credit cards may lead people to turn to payday loans to make ends meet. These loans typically charge interest at an annual percentage rate (ARP) of around 400-600%. Payday loans make credit cards look like a great deal. Not having a bank account is a serious impediment to people trying to get out of poverty.