Reaching Underserved Borrower Prospects: A Case Of A Small Rural Bank

Abstract

Banks want to serve all members of their market, to meet government regulations as well as to follow company policy.  This paper describes a case study of the efforts of a small rural bank to develop a marketing plan to target potential borrowers in underserved groups.  First, market demographic data were used to determine the current population size, income, and race composition of the market.  Second, publicly available competitor data were used to assess peer banks in surrounding market areas.  The third task was to identify underserved socio-economic groups and develop prospect lists.  Fourth, the bank developed outreach efforts to promote bank financial services to target groups.  Fifth, the bank delivered educational programs for target individuals and families.  Sixth, the outreach efforts were evaluated.  Finally, the bank considered options for promoting bank services to underserved residents in the future.  This paper illustrates the difficulty for a small, rural bank to diversify its borrower base, and presents some efforts that a bank can take to pursue its goal of serving all members of its community.