- Posted by Laurie Anderson
- On May 3, 2017
- alternative credit, credit bureau, FactorTrust, lenders, underbanked
Buying, Spending Habits of Underbanked Reveals Opportunities for Lenders
ATLANTA—FactorTrust, The Alternative Credit Bureau, today released its Underbanked Index, highlighting quarterly insights of the earning, spending and living habits of underbanked consumers—a $105B untapped market. The analysis is derived from FactorTrust’s proprietary alternative credit data used in analytics and risk scoring solutions by lenders to make informed decisions about consumers they want. This Index highlights the demographic characteristics, credentials and capacities of the underbanked, like the trend of median loan values among this segment increasing as incomes increase.
“As the leading alternative credit bureau, our updated Index on underbanked consumers is another educational resource we provide the industry that sets us apart,” said FactorTrust CEO Greg Rable. “We continuously update our findings to help lenders, as well as interested associations, analysts and media, to better understand the demographics of this growing segment of the consumer population.”
Determining which consumers are borrowing, how much they borrow, and their income assists lenders with determining right-pricing opportunities and term setting appropriate for the underbanked market.
Additional findings in the Underbanked Index include:
- Age & Gender:
The average age of underbanked consumers at the time of the loan application is 39, and the average age of the borrower in 41. The average loan amount borrowed trends upwards with age, peaking at 45. This trend has shifted to a slightly older demographic over the course of the last several years, due in part to growth in the diversity of products, channels of delivery and average size of loans.
- Income & Loan Amounts:
While the average income for applicants is $2,712 ($32,544 annually), for borrowers, the average is slightly higher at $2,936 ($35,232 annually).
More than 50 percent of underbanked consumers are employed in two primary areas: retail (32 percent) and quick serve restaurants (20 percent). The average length of employment with one employer is 34 months.
Approximately 45 percent of underbanked consumers hold a bachelor’s degree or higher. Another 54 percent hold only a high school diploma, while another one percent has attended a vocational or technical school or program.
An infographic summarizing these and other findings is available at www.FactorTrust.com. To receive the Underbanked Index via email, sign up at ws.FactorTrust.com/UnderbankedIndex, or email marketing@FactorTrust.com.
Data is based on expert analysis from FactorTrust’s database of 250M records related to underbanked consumers collected by the company each quarter. The findings of the Index assist financial institutions, associations, analysts and media interested in tracking, benchmarking or understanding the needs of underbanked consumers. For more information, please visit ws.FactorTrust.com/UnderbankedIndex.
FactorTrust, The Alternative Credit Bureau, is relentlessly dedicated to proven analytics and clean credit information that provide lenders and financial service providers opportunities to grow more revenue, meet compliance regulations and serve more consumers with more credit options. At the core of FactorTrust is alternative credit data analytics and risk scoring solutions not available from the Big 3 bureaus. FactorTrust alternative credit data and analytics accurately predicts risk and the ability to repay near and non-prime consumer loans in real-time. The company’s solutions enable financial service companies an opportunity to uncover creditworthy prospects that are not surfacing via traditional credit sources. Headquartered in Atlanta, the experienced FactorTrust team has delivered unique data and valuable insight to U.S. lenders for more than 10 years. For more information on the quarterly FactorTrust Underbanked Index or the company itself, visit www.factortrust.com.
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