For many Americans, to use or not use a bank is never a major consideration. As we come of age, we open a checking account, learn about savings, enroll in multiple credit card programs, and expand financial relationships with banks, education, car, mortgage and small business loans. This is “mainstream” America, which tends to be heavily credit leveraged through a complicated web of relationships with many types of financial institutions.

 

Meanwhile, there is a huge sector of Americans who have infrequent or nonexistent relations with financial institutions. This group of “unbanked” Americans comprises more than 13 percent of the 105 million households in the United States. The unbanked are typically immigrants, ethnic minorities, the youth, widows, divorcées without credit histories in their own names and people who have filed for bankruptcy and are re-building their credit-worthiness. At first glance, the unbanked may seem like an unattractive market and banks, until the last few years, have for the most part ignored them, leaving them to rely on alternative financial service providers such as check-cashing outlets.

 

Banks are now paying attention to the huge opportunity that the unbanked market represents. The “mainstream” already-banked market is thoroughly saturated with financial products and services, so much so that mailboxes have become filled with credit card offers and various loyalty programs by financial vendors to retain and add-value to existing customers. Financial institutions are looking for a new frontier of customers, and they are easily finding it in the unbanked.

 

The idea for Progreso Financiero was born out of a research project at Stanford's Graduate School of Business led by then MBA student, James Gutierrez, and sponsored by Professors Charles Holloway and Joel Peterson. Raised among Mexican immigrants, James aimed to start a business that helped hard-working Latinos achieve their American Dreams and break into mainstream financial services. James passionately believed in the strong moral fiber and commitment to obligations demonstrated in the Hispanic community, especially among immigrants, and believed these traits would translate into high credit worthiness.

 

The company began in September 2005, and made its first loan out of a small supermarket in San Jose, called Super Mercado Mexico in April 2006. James and the founding team spent the first months of the company working “behind the booth” in Super Mercado Mexico offering credit, taking loan applications, collecting payments, making servicing calls and manually processing loans each night in a tiny back office in Mountain View.

 

From the beginning, James believed in the importance of understanding Progreso’s customers and their needs first hand. After several months in the store, the company hired its first account executive – a former clerk at Super Mercado Mexico – and opened their 2nd booth inside San Jose’s large Latino supermarket, Mi Pueblo. Today, the company has 16 sales points spread across Northern and Central California with plans to rapidly expand in California, Texas and many of the Western states. Progreso believes in hiring from the communities they serve and investing in the development of their employees, as well as our customers.

 

 

>Learn more about Progreso Financiero at their website.