Settling in a new country is an immense challenge for anyone. There could be a new language to master, new cultural norms to adopt, and a lot of new systems to juggle. For many immigrants to the United States, learning how the financial system works is a stumbling block – and one that can prove costly in terms of economic health.
As a financial services company, BNY Mellon seeks opportunities to invest in promoting economic empowerment, and recently provided a $100,000 grant to the International Rescue Committee (IRC) in support of its Expanding Financial Capability Services for Women program in both New York and Los Angeles. The programs offer financial literacy coaching for refugee and immigrant women.
“Virtually all of these women come from low-income populations and they have limited access to employment, income generation and knowledge about how to navigate social and economic systems here in the U.S.,” said Daisey Holmes, BNY Mellon’s Co-Head of Philanthropy and Employee Programs globally.
The IRC programs include in-depth classroom training on budgeting, the use of banking products and credit- and tax-related issues. Participants also have access to financial coaches for one-on-one counseling that covers transactional skills like bill paying, establishing credit history, navigating financial institutions and pursuing long-term financial goals.
“Evidence demonstrates that financial education has an effective impact on New Americans’ financial skills and behaviors by providing them with a base of information on which to build their financial lives in their new home countries,” said Maria Sigalas, an Economic Empowerment Specialist with IRC.
IRC keeps track of the women who participate in its programs and notes that one year after arrival, their clients have higher wage-based incomes, a higher net income, increased net worth and a healthy credit score.
“Notably, women who received financial coaching (especially more than three sessions) were able to improve their financial situation,” Sigalas continued, “improving their net worth and household incomes as well as increasing wage-based income to 63 percent up from less than 5 percent.”
The IRC has found female refugees are far less likely to pursue financial coaching as compared to their male counterparts. IRC’s analysis suggests these factors can deter women from accessing financial literacy programs:
IRC is working to address these barriers to access through programs like the ones BNY Mellon is supporting in New York and Los Angeles.
“We’re piloting special female-only groups that focus on economic empowerment more broadly and offering home visits to reach women who face challenges related to childcare and transportation,” said Sigalas.
“We were really impressed that IRC provides one-to-one coaching, focused support and technical assistance,” Holmes noted. “These programs are perfectly aligned with BNY Mellon’s initiatives to support economic empowerment of people in need to power a more inclusive financial system.”
All of the women came to these IRC programs with some financial knowledge, but many had never personally managed their finances. Through the training, they fine-tuned their skills and left feeling more confident dealing with money matters.
“At the end of a class on building credit, a client said it inspired her to open her own back account and put her name on some of the home’s bills so she can start building her personal credit history, separate from her husband’s,” said Sigalas.
“The most rewarding aspect of the Expanding Financial Capability Services for Women program is seeing clients learn and grasp materials that they were previously uncomfortable with,” Sigalas continued. “We can see the impact firsthand, not just in tangible outputs, but also in clients’ attitudes and willingness to more openly and confidently discuss their personal finances.”