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Poverty in the United States |
Despite the status of the United States as one of the wealthiest countries in the world, a significant fraction of the population lives below the poverty line. According to the U.S. Census figures, some 36 million people lived in poverty in the United States in 2005.1
Consistent with many other countries, poverty strikes women especially hard in the U.S.: 20.4 million of the nation’s 36 million poor are women and 13 million of these women are in what the U.S. Census Bureau has accepted as “deep poverty”. Of that number, 9.8 million are single mothers who are by far the poorest group with 38 percent living below the poverty line. This compares to the 11 percent of all Americans who live below the poverty threshold.
Immigrants constitute a significant fraction of the poor population in America. According to U.S. Census figures, 8.7 million of the 36 million persons living in poverty in 2005 in were first generation immigrants and their family members. This means that roughly one in four people living in poverty is an immigrant or member of an immigrant’s family.
The graphs below offer further evidence of the poverty problem in the U.S. and how women and immigrants are disproportionately affected.
1The US Census Bureau defines poverty as a function of the number of individuals living in a household and the amount of income that the household generates.
To most effectively address the poverty problem in the U.S., and consistent with the Grameen organization’s historic focus, Grameen America has a particular focus on serving women, including immigrant women. To learn more about poverty in the U.S., please visit: http://www.census.gov/hhes/www/poverty/poverty.html
Accessible Microfinance is Necessary in America
On top of the poverty problem in many U.S. communities, the need for accessible microfinance in America is great. It is estimated that 28 million people in the U.S. are unbanked and nearly 45 million have only limited access to financial institutions. The problem is exacerbated by the U.S. credit rating system which excludes all those who lack collateral, education, references or a banking history. The U.S. financial system excludes the poor, especially recent immigrants, because they do not have credit ratings and cannot obtain them because they cannot meet some or all of the credit rating requirements.
The traditional process of establishing credit with these organizations is largely based on four fundamental pillars: 1) A person’s income level, 2) The level of education attained, 3) The guarantee of a person with established credit (co-signer) and 4) Track record of everyday life needs such as bank accounts, rent and utility payments. While a fully functional model, one that reaches many levels of society including college students, the credit report approach unfortunately excludes the most of the poor who cannot meet the requirements.
The income of many low-income people is sometimes undeclared, providing no substantiation to a level which will meet credit underwriting requirements. A high school education is usually the highest level of education achieved, and for new immigrants, their level of education (although significant at times) is rarely accredited at the same level as a locally educated citizen. Their circle of friends and family is usually in the same predicament, leaving very little opportunity for finding guarantors or co-applicants who can enhance the credit application. Finally, because money is so scarce, it is common for these same individuals to find rooms for rent, or living quarters with multiple individuals and these arrangements do not provide them with a paper trail of rent or utility payments. Together, these conditions usually make it impossible for the typical poor person in America to obtain a credit score and access to mainstream credit in the United States.
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