Know Your Borrower: The Four Need Cases of Small-Dollar Credit Consumers
The Center for Financial Services Innovation (CFSI), with support from the Ford Foundation, has undertaken extensive consumer research to examine the needs, decisions, and experiences of SDC consumers, with the goal of promoting the development of high quality SDC solutions. As CFSI defines it, high-quality credit is affordable, marketed transparently, priced fairly, structured to support repayment without creating a cycle of repeat borrowing, and supports credit-building. This report explores the financial needs that drive borrowers’ demand for credit—the necessary starting point for a detailed understanding of the consumer and the marketplace. It builds on previous research to more comprehensively identify and classify the major categories of financial need that form the marketplace for non-traditional small-dollar credit.