Jan 01 1995

Strategic Opportunities in Serving Low to Moderate Income Individuals


This monograph examines the market opportunities available to credit unions who can offer cost-effective financial services to low-and-moderate-income people. The authors contend that this population is underserved by mainstream financial institutions.

Large numbers of low-and-moderate-income individuals do not have checking accounts or savings accounts and do not fit into the current service delivery format of most established financial institutions. Burger and Zellmer see these individuals as a vast, untapped market that can be served in cost-effective ways to the benefit of all members. This study first describes the characteristics of individuals in this market. They urge credit unions to treat approaching this market as a business proposition, not as charity. This means developing a business strategy, then implementing it through innovative packages of services tailored to the needs of the individuals being served.

To develop key strategic factors for a successful plan to serve low- and moderate-income individuals, Burger and Zellmer conducted extensive on-site visits to three credit unions with successful programs. While the three credit unions were fairly diverse, the authors found many similarities in their approaches to serving individuals of low and moderate incomes. From their visits, the authors developed strategic guidelines for developing services to meet the needs of low and moderate income individuals.

Report Number 14