19 Jun Financial Inclusion – 4 Steps to Economic Empowerment
The saying goes that ‘money can’t buy happiness’, but if you’ve ever lost sleep worrying about how you’re going to make a mortgage repayment or put gas in your car, you’ve probably been keen to test the theory.
Around one in three people are currently experiencing financial stress. Compounding the problem is the increasing number of people unable to access mainstream finance options. Casual employees, young adults with poor or no credit history, and new immigrants can find themselves among those known as those ‘financially excluded’ – unable to access a lifeline from major lenders when push comes to shove.
Non-traditional lenders are starting to emerge from within the financial landscape, willing to take the risk on those that the big institutions won’t, and offer alternatives to the predatory practices of the financial cowboys. Some bodies providing small cash loans are backed by NGOs and are putting people before profits with life-changing impacts for those who need it most.
When you’re in a financial slump, it can be difficult to see the forest for the trees. However, by altering habits and enlisting support, you can improve your position, and even get ahead.
Guarantee Your Future
Buying a property is one of the most significant financial milestones you’ll ever make. Unfortunately, when you’re stuck in the rental market property ownership can seem like a distant pipedream.
How can you save for a deposit and get a mortgage lender to take you seriously when all your money goes to rent? If you have someone willing to guarantee your loan – put their own property or cash down as a surety – you may be able to enter the property market without little or no deposit. Just make sure you read the fine print on your loan. According to consumer advocacy groups, some guarantor loans come with unreasonably high interest rates.
Sadly, a significant number of females suffer financial exclusion while in, or after escaping abusive relationships. Typically, an abusive partner has complete control over the family finances, and a woman finds herself without any financial security, assets or credit rating to obtain a loan.
Domestic violence campaigners have been advocating for the courts to recognise ‘financial violence’ and support women who find themselves trapped in dangerous or abusive circumstances due to the inability to access capital that could help them start a new chapter.
Make Smart Applications
While it’s tempting to random fire loan applications with anybody and everybody in the hope of getting an approval, safety in numbers doesn’t apply to financial lending. All applications will be recorded in your credit history, and a string of rejections isn’t going to help your cause. Interestingly, according to some studies, more than half of Americans don’t have an adequate credit rating to be able to obtain a loan.
Do your research on the approval criteria before applying for a loan to maximize your chances, and keep a close eye on your credit rating.
Investigate ‘No Interest’
In most countries, government agencies or not-for-profits have some form of ‘no interest loan’ to help people buy essentials like white goods or pay utility bills. Such programs are instituted to help those who have run out of other options. Do your research on what is available and to ascertain whether you meet the eligibility criteria.
Financial inclusion may be a 21st Century buzzword, but it’s also a pressing social issue that is prominent on the agenda of the United Nations along with major financial institutions across the developed world. Help is out there, as globally we strive to become a more financially inclusive society.