Financial Services to Unbanked Reflect Potentially Huge, Report Suggests
A new report from the Center for Financial Services Innovation suggests that products and services marketed to unbanked and underbanked consumers could represent a huge and growing market for the nation's credit unions.
The organization's 2011 Underbanked Market Sizing Study found that the nationwide market for services to underbanked and unbanked consumers, which the organization defined as “those consumers whose financial needs are not fully served by traditional financial institutions,” at $78 billion, an increase of 7% over 2010.
Market leading products in this sector included subprime credit cards (39.4% of the market), payday loans obtained over the Internet (32.4% of the market), and open loop pre-paid cards both payroll (21.8% of the market) and general purpose reloadable cards (21.6%)
The largest revenue generator for the segment was subprime auto loans which generated $27 billion and represented more than a third of interest and fee income generated by the segment. Subprime auto loans also grew at the rate of 9.9% in 2011, CFSI reported.