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Small-Dollar Credit –

The Demand Side

Jeanne M. Hogarth

Center for Financial Services Innovation

FDIC Committee on Economic Inclusion

April 24, 2014
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Who uses SDC?

32%
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Who uses SDC?

32%
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Income volatility within a family. . . .
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Who uses SDC?

9%
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Who uses SDC?

30%
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Overview of CFSI’s SDC research

• Funded by the Ford Foundation

• SDC Consumer Datasets• US Financial Diaries

Study Sample Consumer Source Research

Partners

1. QuantitativeSurvey

1,100+ SDC consumers

(payday, pawn, depositadvance, installment,

auto title loans)

GfK KnowledgePanel(nationallyrepresentative onlinepanel)

RourkeO’Brien(Princeton)

2. QualitativeInterviews

31 SDC consumers via

individual IDIs

Regions Ready Advance

(AL); Progreso Financiero(CA); ZestCash (KS)

Jennie Rom

(University Washington

SDC Research Agenda:

• “A Complex Portrait: An Examination of Small‐Dollar Credit Consumers

• “Know Your Borrower: A Needs Analysis of Small‐Dollar Credit Consum
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Market sizing
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About CFSI

Connect

We foster dialogue

and collaboration

through CFSI events

and networking

opportunities.

Inform

We provide deep

consumer insights

and industry

research.

The Center for Financial Services Innovation is the authority on c

financial health, leading a network of financial services innovators 

to building better consumer products and practices.

Innovate

We seed and test

promising new

ideas.

We 

se

f

non

Using our Compass Principles as a framework for qual
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The Compass Principles

Embrace InclusionResponsibly expand access financial services

Build TrustDevelop mutually beneficial products that deliver clear and consistent value 

Promote SuccessDrive positive consumer behavior through smart design and communication

Create OpportunityProvide options for upward mobility

Profitability and Scalability • Deep Customer Knowledge Variation and Choice • Relationships • Cross-Sector Pa

These principles are grounded by a solid foundation of v
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Compass Guide to SDC

1. Made with a high confidence in the

borrower’s ability to repay

2. Structured to support repayment

3. Priced to align profitability for the

provider with success for the borrower

4. Creates opportunities for upward

mobility and greater financial health

5. Has transparent marketing, communications, and 

6. Accessible and convenient

7. Provides support and rights for borrowers
© 2013 

About CFSI

Connect

We foster dialogue

and collaboration

through CFSI events

and networking

opportunities.

Inform

We provide deep

consumer insights

and industry

research.

The Center for Financial Services Innovation is the authority on c

financial health, leading a network of financial services innovators 

to building better consumer products and practices.

Innovate

We seed and test

promising new

ideas.

We 

se

f

non

Using our Compass Principles as a framework for qual
© 2013 

Links

A Complex Portrait: An Examination of Small‐Dollar Credit Consum

(http://www.cfsinnovation.com/system/files/A%20Complex%20Po

%20An%20Examination%20of%20Small‐Dollar%20Credit%20ConsKnow Your Borrower: A Needs Analysis of Small‐Dollar Credit Cons

http://www.cfsinnovation.com/CFSI_KnowYourBorrower.pdf

Know Your Borrower Info‐Graphic

http://www.cfsinnovation.com/RES_Ford_SDC_Need_CasesInfogr

2013.pdfCompass Guide to Small Dollar Credit

http://cfsinnovation.s3.amazonaws.com/CompassGuideToSDC.pdf
www.cfsinnovation.com

jhogarth@cfsinnovation.com

202.888.7586