Financial services are essential for people to manage their money and build wealth. However, access to these services has not been equal for everyone. In the United States, about 4.5% of households are unbanked, meaning that no one in the household has a checking or savings account. This rate declined during the pandemic due to people opening accounts to receive stimulus funds from the government.
Despite this, disparities between the banked and unbanked persist, particularly in southern Mississippi. Donald Jenkins, a resident of South Memphis, used to keep his money close to his chest. He was a drug addict and couldn't maintain a job, so he kept his money at home instead of in a bank. Paula Jones, a warehouse worker, also used to hide her money in a can because she was taught that banks weren't an option. Black households are five times more likely than white households to be unbanked. Charlestein Harris works as a credit counselor at Southern Bancorp in Clarksdale, Mississippi.
She explains that this lack of access is due to redlining and discrimination policies that have been in place since the early 1900s. This has caused mistrust of banks in Memphis, where 45% of black residents still don't have access to banking services. Donald Jenkins was hesitant to even walk into a bank because he felt uncomfortable with the white people who worked there. However, Steve Nash of Advance Memphis believes that the abolition of redlining has had a big impact on the community's trust in banks. Despite this, anxiety still persists. When unprofitable bank branches closed in rural communities, Southern Bancorp became the only option for many people.
Even when communities do have a bank, barriers persist. Elizabeth Johnson didn't make enough money to meet minimum balance requirements and her employer paid her with a reloadable debit card instead of a check. Johnson went to Southern for credit counseling and is now working towards improving her credit score so she can buy some land. Unfortunately, bad credit or lack of credit history can make it difficult for people to get loans from banks and they often resort to exorbitant options. Lawrence Turner of the Black Clergy Collaborative partnered with HOPE Credit Union, a CDFI, to offer small loans at a relatively low cost. This is much better than payday lenders who charge interest rates or fees that can reach 300 or 400 percent annually. Access to financial services is essential for people to manage their money and build wealth.
Unfortunately, disparities between the banked and unbanked persist in southern Mississippi due to redlining and discrimination policies that have been in place since the early 1900s. Despite this, organizations like Southern Bancorp and HOPE Credit Union are working hard to provide access to financial services for everyone. Organizations like Southern Bancorp and HOPE Credit Union are striving to bridge the gap between those who have access to financial services and those who don't. They are providing resources such as credit counseling and small loans at low interest rates so that everyone can benefit from financial services regardless of their background or income level. The fight for financial inclusion is far from over but organizations like Southern Bancorp and HOPE Credit Union are making progress every day. With their help, more people will be able to manage their money and build wealth without fear or anxiety.