By CALLIE DANIELS BRYANT
More than 15 percent percent of Mississippians do not have a bank account. Close to a quarter of Mississippians are under-banked, meaning they have limited access to retail banks and credit unions, instead preferring to cash paychecks immediately with a nontraditional financial service.
With these statistics biennially reported by Federal Deposit Insurance Corporation, banking branches and Mississippians have responded by working to provide financial literacy to the unbanked and under-banked.
Two native Mississippians Sheena Allen and Tim Lampkin co-founded CapWay, which is a mobile app for iPhones that provides an education in financial literacy so the users can cope with challenging financial situations such as living in a bank desert.
“The FDIC has reported on this issue for years,” said Lampkin. “Several banks are moving away from physical branches, and more predatory lenders are moving into communities. Banking deserts are real, especially in the rural South. This creates a difficult situation for those who are trying to improve their financial situation.”
The CEO of CapWay, Sheena Allen was influenced by her childhood in Terry when she created the app.
“I would see family members and parents of my friends cash their checks at places other than the bank,” Allen said. “I never really thought much about it as a child.”
After starting her first tech company in college, Allen left Mississippi for Silicon Valley in California, and worked in Austin, Tex.
“When I came back home, I would still see people cashing their checks at grocery stores or check cashing places, and I really took notice for the first time the amount of payday lenders and title loan places that were in Jackson,” Allen said, “Unlike when I was a child, I was now an entrepreneur, and this sparked my interest to use technology to make a change. Once again, I have family members that are a part of this population.”
While researching the unbanked and under-banked issue in Mississippi, Allen noticed this trend is a global issue.
“However, with Tim and I both being from Mississippi — and Mississippi having the highest population of unbanked and under-banked residents — we started in Mississippi first,” Allen said. “It’s an opportunity to help and improve home first.”
“The wealth disparities in our state are outrageous, and it is because there is a lack of financial services to improve the lives of underserved residents,” Lampkin added. “We are trying to help one person, one family, and one community at a time become financially healthy.”
Allen and Lampkin are working to finalize partnerships in Mississippi as well as partnerships in works as they plan to expand CapWay to other states to provide financial literacy first and foremost.
“We started with financial literacy because it is the core of everything that CapWay does and stands for. You must use knowledge to impact mindset and behavior. It is impossible to choose the better option when you don’t know the better option exists,” said Allen.
As CapWay expands across the states, Allen plans to offer more financial tools such as mobile banking in the future.
Also supporting the cause of financial literacy education is Will Lofton, consumer banking executive for Regions in Mississippi.
He said: “Our long-time partnership with Operation HOPE has helped thousands of consumers in Mississippi understand and use credit wisely, strengthen their overall financial management skills and become better prepared to achieve homeownership, avoid foreclosure or meet other financial goals. We also participate in a number of ‘financial literacy’ seminars and workshops for students and other audiences throughout the state each year.
“Education, however, is just one need when it comes to borrowing money, building credit and managing finances.”
Regions offers several banking tools, such as reloadable debit cards, credit cards that help customers rebuild their credit, and mobile banking with multiple options.
“I can tell you that in terms of a solution to this problem, Regions is committed to continuing to provide to unbanked or under-banked people with the tools they need to achieve financial confidence and improve their quality of life,” Lofton said.