But what makes someone unbanked or underbanked? How do we\ndefine that? And why does Southern talk about it so much? We\u2019ll be answering\nthose questions \u2013 and more \u2013 over the course of the next few blog posts. But\nlet\u2019s start with what and where we\u2019re talking about. <\/p>\n\n\n\n
To be unbanked means that you have no formal connection to a\nbank. You don\u2019t have a checking or savings account, you rely on alternative\nfinancial services like check cashers and payday lenders. [1]<\/a>\nIt\u2019s likely that you live in a cash-only economy. <\/p>\n\n\n\n There are approximately 65,000 people in Arkansas that are\nunbanked \u2013 that\u2019s about 8 percent of the state\u2019s population, or about the size\nof Conway. In Mississippi, almost 95,000 people are unbanked, equivalent to 12\npercent of Mississippians. Nationally, about 7 percent of households are\nunbanked. As the above map shows, there are a lot of unbanked households in the\nSouth. <\/p>\n\n\n\n To be underbanked means that you have a banking relationship\nat an insured financial institution \u2013 like a checking account \u2013 but that you\nstill use alternative financial services like money orders, check cashers,\npayday loans, refund anticipation loans, rent-to-own services, pawns shop\nloans, or auto title loans.[2]<\/a>\nFor instance, an underbanked household might have checking account, but they still\nuse a check casher every payday. <\/p>\n\n\n\n Almost one-fourth of people in Arkansas are underbanked;\nmore than one-fourth of Mississippians fall into this category. Combined,\nthat\u2019s almost 600,000 underbanked consumers in both states. Across the country,\nalmost 20 percent of the population is underbanked. <\/p>\n\n\n\n Being unbanked and underbanked has real cost in people\u2019s\nlives. It harms their financial health. It also can have negative economic\nimplications for states with larger unbanked and underbanked populations. And\nit breaks down along racial lines. We\u2019ll explore those topics in future posts,\nbut, for now, the important takeaway is that there are too many people unable\nto build wealth because they are left out of the financial mainstream. <\/p>\n\n\n\n In order to be wealth builders for everyone, we have to\nreach everyone. That\u2019s why you hear us talk about the unbanked and underbanked\npopulation so much. [1]<\/a>\nApaam, G., Burhouse, S., Chu, K., Ernst, K., Fritzdixon, K., Goodstein, R.,\nLloro, A., Opoku, C., Osaki, Y., Sharma, D., & Weinstein, J. 2018. \u201c2017\nFDIC National Survey of Unbanked and Underbanked Households: Executive\nSummary.\u201d https:\/\/www.fdic.gov\/householdsurvey\/2017\/2017execsumm.pdf<\/a><\/p>\n\n\n\n![\"\"](\"https:\/\/staging.banksouthern.com\/wp-content\/uploads\/2019\/11\/Unbanked-South-2013-2017-1-1024x790.jpg\")
<\/a>![\"\"](\"https:\/\/staging.banksouthern.com\/wp-content\/uploads\/2019\/11\/Underbanked_South-2013-2017-1-1024x790.jpg\")
<\/a>
<\/p>\n\n\n\n
\n\n\n\n