CFSI, Core Study: Underserved Market Worth $89 billion in 2012 (Dec. 12, 2013)
The U.S. financially underserved market was worth $89 billion last year, according to a new study from the Center for Financial Services Innovation (CFSI). That’s the amount earned in 2012 from interest and fees by providers of financial products for the underserved—an 8 percent increase over 2011, according to the CFSI’s third annual Financially Underserved Market Size Study, conducted in partnership with Core Innovation Capital.
The report examined 23 financial products used by more than 68 million financially underserved consumers in the U.S. The $89 billion in fee and interest revenue generated by those products was based on an overall market volume of $792 billion in principal loaned, funds transacted, deposits held and other financial services provided. Among the strongest areas of growth in the underserved market were payroll cards, GPR prepaid cards and subprime auto loans, revenue on which increased by 32.7, 28.5 and 23.6 percent, respectively. Short-term credit products were the fastest-growing product category overall, generating $50 billion in revenue in 2012, up 9.9 percent over 2011.
The results of the survey demonstrate “a range of continued opportunities for those seeking to develop high-quality, affordable products to meet the needs of underserved consumers,” CFSI said. The steady growth is expected to continue, with 2013 projected to see an additional 8 percent uptick in fee and interest revenue, according to the report authors.