On the Fringe: How alternative financial services are related to household food insecurity

Low-income families in the US show high rates of being unbanked or underbanked. Twenty percent of female-headed households have no bank account (are unbanked). An additional 28 percent are underbanked, meaning they have some type of conventional bank account but primarily rely on Alternative Financial Services (AFS) such as check cashing, pawn shops, pre-paid credit cards, and money transfer services. Avoidance of conventional banking services is associated with less capability of managing finances, building assets, and escaping poverty. Female-headed households also have the highest rates of food insecurity compared to all other households. Our mixed-methods research in the ongoing Witnesses to Hunger study—where we are working with low-income mothers to describe experiences with food insecurity as they relate to public assistance programs—has found that household food insecurity is associated with greater financial stress, less likelihood to have a bank account, and widespread participation in alternative/fringe financial services. This presentation will describe both quantitative and qualitative results on financial management skills and financial stress in relation to food security status. Quantitative findings show evidence that adverse childhood experiences were significantly correlated with financial stress (Spearman r =.415 p = .025); and that financial stress was correlated with food insecurity status (Spearman r = .611, p < .001). In addition, we will describe narratives found in 44 qualitative interviews regarding participation in alternative financial services that demonstrate how financial exclusion and financial risk among low food secure families can affect maternal and child health.