Building Assets, Building Relationships: Bank Strategies for Encouraging Lower-Income Households to Save

Saving enables individual households to meet unforeseen expenses and to plan for their financial futures. Not surprisingly, low- and moderate-income (LMI) households have the most difficulty saving. There is a common perception that banks do not view LMI households as potential profitable customers, but banks already have a relationship with a large number of these customers. This article explains the challenges LMI households face in building assets and examines the incentives banks have for encouraging these customers to save. The article also describes some strategies banks have used to build profitable relationships that also benefit lower-income consumers.

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