Barriers and facilitating factors to the use of the financial system among low income and foreign born individuals: the case of East Los Angeles

The use of financial institutions has been considered to facilitate saving and asset accumulation. However, low income and foreign born individuals are less likely to use financial institutions and more likely to rely on alternative financial services. This study was a cross-sectional, qualitative research examining the barriers and facilitators to the use of financial institutions among low-income and foreign born residents of East Los Angeles. The types of alternative financial services in East Los Angeles and their prevalence were also examined. Web search was conducted and interviews were administered to 3 key informants of East Los Angeles. Barriers included residents' lack of trust in financial institutions, negative past experiences, lack of financial literacy, and lack of financial education provided by financial institutions, among other factors. Banks were also less prevalent and alternative financial services were more prevalent in East Los Angeles than in a higher-income nearby city