Banking on Bankless Neighborhoods

Nine years ago, Elwood Hopkins and Daniel Tellalian decided they were done with the philanthropy business. Working in Los Angeles, where they had witnessed the economic aftermath of the 1992 riots, they were determined to change the face of the city’s low-income neighborhoods. Having done their time in the nonprofit sector–Hopkins was the executive director of the Los Angeles Urban Funders initiative and Tellalian was an economic development specialist–they knew that brow beating and pressure campaigns have their limitations. They weren’t going to help tighten up Los Angeles’ economic divide by serving meals to the homeless or starting after-school programs. Instead, they would have to turn their well-intentioned mission into a business. They would have to be greedy.

Their brainchild is called Emerging Markets Inc. Here’s how it works: The Emerging Markets team combs a low-income neighborhood, searching for the kind of market information that can’t be gleaned from a computer screen–information like social dynamics and community politics. Next, Hopkins and Tellalian offer their on-the-ground market research to banks as cold, hard proof that they’re missing opportunities in these neighborhoods. Once a bank sets up shop, Emerging Markets commissions local teachers, pastors, landlords–anyone who has influence in the community–to educate their neighbors on banking practices. Goodbye, check-cashing window; hello, real bank. If things go as planned, says Tellalian, it can result in “millions of dollars in new jobs and vendor spending in places where issues of perception normally scare a lot of businesses away.” …