In the movie, It’s a Wonderful Life, George Bailey uses his position at the local savings and loan to rescue his town in a time of crisis. It isn’t often that banks get to save the day in such a dramatic fashion, but they can play a vital role in helping communities thrive.
Keeping the Money Flowing
Adequate cash flow can help a community thrive. Banks facilitate this cash flow in a variety of ways.
- First, banks are employers. Bank employees spend their paychecks at local businesses, which in turn helps these businesses hire more employees, who also spend their money in the local community.
- Second, banks are a vital resource for business growth. Most businesses rely on banks for at least part of the capital they need to start a new business or grow an existing business.
A strong banking system helps attract new businesses and strengthen existing ones, which means more jobs, services, and products for residents. Finally, banks are also important sources of funds for consumers. Access to credit helps grow the local population and maintain a stable housing market. Consumers who have access to credit usually spend some of those dollars at local businesses, which helps those businesses to expand, which in turn helps grow the local economy.
Growing Underserved Communities
Lack of access to banking services and credit is a barrier that contributes to the cycle of poverty in many underserved communities. Banks can help break this cycle by opening branches in underserved areas.
Banks who choose to extend credit to members of these communities can help to increase homeownership, make it possible for more families to purchase transportation, which increases their job opportunities, and provide funding for job training and college educations. They can also make it possible for more small businesses to serve these communities, creating additional jobs and opportunities for growth.
Assisting Communities With Disaster Recovery
Banks often play a vital role in helping communities recover from disasters. Banks can help rebuild destroyed property through low-interest loans, charitable donations, and volunteer efforts. They can also help businesses reopen, which helps community members return to work and access the necessary goods and services.
One of the primary purposes of a bank is to provide a safe place for customers to keep their money. Banks also help provide security in other ways. Many banks offer financial planning services that help customers plan and save for their retirement, their children’s college educations and other major life events. Many also offer additional products such as investment planning, mutual funds, estate planning and life insurance that can help their customers create a financial safety net.
Supporting Community Programs
Banks give back to their communities in many ways. Local banks are often major supporters of local schools. In addition to driving the real estate market, which helps to funnel funds into the school system through the contributions of property owners, banks often directly contribute to school programs.
One such example is the annual Back-to-School program of GBTI Bank which helps local children with school uniforms, stationery, backpacks, lunch bags, and other school essentials. Schools aren’t the only benefactors of the charitable work of local banks. Many banks contribute money and volunteer hours to a wide variety of causes that are important to their local communities.
Promoting Local Industry
Whether it’s agriculture, tourism, manufacturing or something else, the financial resources of local banks can be an important part of promoting the local industry. Local banks can become experts in the important industries in their communities and often provide specialized financial products and knowledge that might otherwise not be available to the community. In addition to supporting existing industries, banks can help local entrepreneurs launch new industries.
Serving As a Community Hub
A local bank is a place frequently visited by members of the community. As such, banks can help promote local businesses and events, keep communities informed on vital civic issues, and promote and finance community events. Since establishing a bank account is one of the first things most new residents do, local banks can play an important role in helping new residents integrate into their communities.
Supporting Young People
Helping their parents fund their college educations isn’t the only thing local banks do to support young people. Banks often support youth programs such as after-school programs, youth sports, and career education. They also play a role in educating young people about handling their finances. Banks can help young adults transition into their adult lives by assisting them with financing their first home or car and saving up for their wedding or the birth of their first child.
Whether it’s keeping the local economy running, or helping a young person get their start in the adult world, local banks play a key role in maintaining the health and growth of local communities. When consumers and businesses support their local banks, they help support themselves.