Digging deep into financial behaviors of customers around the world uncovers similarities among many segments. CGAP’s research found that overall, both low-income and more affluent segments express the same needs for education, nutrition, stable income, housing, and well-being. But the low-income context also introduces a higher level of uncertainty.
We found that different segments can also share drivers: They want to choose the right financial products and services. They expect to be treated with respect by employees and agents. They want to voice opinions and grievances. They seek products and services that offer financial control. However, life circumstances of low-income people often lead to a sense of exclusion from formal financial services.
Low-income individuals seek financial predictability, reliable income, and a safety net, but may face challenges and risks that prevent them from achieving these goals. They may not have a stable source of employment – which leads to fluctuating income. They may accept lower paying jobs to smooth out income flows. They’re often concerned with the timing of funds, easy access to liquidity, and income gaps. They may need more withdrawals, lower deposit limits, and access to smaller amounts of credit. The timing of an insurance claim payout can be more critical to a low-income individual than to a more affluent one.