Proving Identity Remains Roadblock to Accessing Capital Worldwide
A 2016 report by the World Bank titled, Identification for Development, calculated that over one-fifth of the world population cannot prove their identity, accounting for nearly 1.5 billion people globally. The inability to prove identity can create significant issues in gaining access to basic services and rights. Internationally, less than half of the world’s poorest households, approximately 375 million adults, have a bank account.
Nationally, un- and underbanked Americans account for more than one quarter of the U.S. population. Combined with credit invisible consumers, a significant portion of U.S. households rely each month on alternative financial services. NAFSA member tribal lending entities (TLEs) only loan money to individuals with confirmed employment and a verified bank account. Unique credit algorithms allow TLEs to assess creditworthiness outside conventional credit scoring procedures that alienate and penalize millions of Americans for entering adulthood (no credit scoring data) or living in the wrong neighborhood (redlining and bank branch closures). So long as banks continue to ignore the financial needs of millions of Americans, TLEs will step in to provide products and services to help households responsibly manage finances.