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Atlanta needs financial empowerment intervention

Financial Inclusion Thought Leaders

Atlanta needs financial empowerment intervention

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By Operation HOPE

The only true international city in the South, Atlanta is home to some of the most successful entrepreneurs and minority-owned businesses. A city where innovation and the economy thrive, Atlanta has for so long been recognized as one of the top American cities for minorities, particularly African-Americans, to become financially secure.

However, despite the success of many Atlantans, there is no denying that Atlanta represents a tale of two cities. There are still several underserved communities in Atlanta where people, specifically minorities, have limited access to capital, housing, jobs, banking and financial educationa major cause of poverty in the city. Research shows that Fulton County has a very high percentage of unbanked residents and has seen an increase in the number of pawn shops and check cashers in recent years. These alternative financial services providers are clustered in majority minority neighborhoods exacerbating the cycle of financial exclusion for blacks and other minority residents.

In Fulton County alone, 36% of residents are either unbanked or underbanked, and pay, on average, $14 to cash a $500 payroll check.  From a racial lens, according to a 2018 Trulia and National Fair Housing Authority report, more than 50% of the population is made up of any combination of people of color, and Atlanta has 35.1% fewer traditional banking institutions than majority-white census tracts, on average, and twice as many alternative-banking establishments.

In Fulton County, residents in alternatively banked neighborhoods are predominantly racial minorities, where 57% of residents are black compared to traditionally banked neighborhoods, where 62% of residents are white. Operation HOPE believes that segregation of banking services plays a pivotal role in the extreme wealth gap and poverty prevalent in Atlanta. The percent of individuals living in poverty in the alternatively banked neighborhoods in Fulton County is almost two times higher than the poverty rate in traditionally banked neighborhoods (24% compared to 13%, respectively).

Furthermore, the persistent racial distribution in Atlanta has led to concentrated areas of blacks and other minorities living in poverty. The most impoverished areas in Atlanta are majority minority zip codes. In fact, the 10 zip codes with the highest rates of poverty in Atlanta all encompass black neighborhoods. These same neighborhoods have a median income of only $32,427 – well below Atlanta’s median income of $49,398 and Fulton County’s median income of $58,851.

Operation HOPE, along with partners like SunTrust Bank and Wells Fargo, is working to provide financial empowerment to underserved communities to alter these drastic disparities made possible by persistent segregation caused by market policies and practices. Since our inception in 1992, Operation HOPE, has served more than 2.8 million individuals and directed more than $2.7 billion in economic activity into disenfranchised communities through the HOPE Inside programming, nationally—transforming thousands of underbanked and unbanked residents, including many Atlantans, into thriving banked customers.

The financial exclusion of minorities in Atlanta is a prime example of why the work of Operation HOPE is so important. By closing financial literacy gaps, Operation HOPE aims to alleviate economic inequalities such as those seen in minority neighborhoods.

Read the detailed report from the HOPE Research and Impact Institute here: http://operationhope.org/atlanta-needs-financial-empowerment-intervention/

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