No banks will
communicate with them. Their credit scores are low. But low-income earners are
more than what they appear to be. In a sense, mainstream financial services are
only applicable to those that financial institutions deem capable of earning
and repaying their dues effectively. Here are three compelling reasons why you
should consider small-income earners in your community as an investor or
lender.
1.
They
Lack Education
Poverty is
not about the earning capability and the lack of opportunities in a country; it
is about the mis-education of the majority regarding finances, which limit
their capability to spend. Consumer activity is highly important in raising the
economy. Educating them about the opportunities of proper financial management
can boost the local economy and encourage them to spend or ask for financial
assistance.
2.
Flexibility
Small-income
earners only save a little or even none of their monthly income. This makes
them high risk clients. However, if you clearly know their motives in procuring
a financing and you could see the high profit they and you could gain from
providing assistance, flexible options must always be welcome. Studies show
small-income earners are capable of repaying their dues effectively with proper
guidance.
3.
Credit
Score
These people
are more personal in their relationship with you as a financial institution,
which improves their earning capabilities as you help develop their financial
capabilities and knowledge. They will soon earn their credit scores, which
would help develop the local community, and in turn, the value of the
investments you have deposited in the area.
