“Almost everything has gone up…50%, 100%…”Fuel was $3.20, now it’s $5.00. It doesn’t go down, but [wages] don’t go up at the same rate…”
Cecilia is not alone in her experience. Across the country, low-income families like hers are contending with stagnant wages while facing the disproportionate burden of persistent inflation.
Losing Purchasing Power
Over the last 18 years, MAF has supported more than 15,000 clients through its Lending Circles program. To better understand how inflation is affecting the families we serve, we analyzed the median household income for Lending Circle applicants over the past decade. The results tell a more complicated story than the headline numbers suggest.
In 2016, the median MAF household earned $36,000 annually. By 2024, that figure had risen to $46,000, designated as “Nominal Income” in the chart below.
However, despite earning $10,000 more, the median household could not afford a better standard of living than it could in 2016.
After adjusting for inflation, the “Real Income” trended downward beginning in 2020, leaving families with slightly less purchasing power in 2024 than they had nearly a decade earlier.
Falling behind
For the median U.S. household, the story looks very different. Between 2016 and 2024, median household income increased from $59,000 to $84,000. After adjusting for inflation, that translates to nearly a 9% increase in purchasing power. Although the real gain is smaller than the $25,000 increase in nominal income, it still represents an increased ability to afford everyday expenses and keep up with rising costs.
The Cost of Inflation
The median American household saw its income grow faster than inflation, making it easier to absorb rising costs for essentials like housing, fuel, and groceries. But for Elson’s family, rising costs have meant making difficult tradeoffs:
“Sometimes jobs don’t pay as much as you want. It’s not much, and you can’t save with what they pay you each week… Right now, we can’t eat meat because meat is very expensive.”
As inflation continues to rise, its day-to-day effects are felt most acutely by those with the fewest financial resources.
Higher-income households are more likely to have savings, appreciating assets, and wages that keep pace with inflation, helping them absorb rising prices.
For a household living on $46,000 a year, however, rising costs consume a much larger share of income, leaving less money for essentials like food and even less flexibility to absorb unexpected expenses.
Meeting the Moment
Despite earning more on paper, low-income families like Cecilia’s and Elson’s are no better able to afford the basics than they were nearly a decade ago. As a result, they are forced to make difficult choices at the grocery store, have fewer opportunities to save for the future, and are less financially prepared to weather unexpected emergencies.
As inflation persists, low-income families risk falling further into financial distress. This reality reinforces MAF’s commitment to providing financial products and services centered on the needs of those at the margins. Lending Circles is one example of that commitment. Through the program, MAF offers 0% interest, credit-building loans that provide a safe alternative to high-cost, high-interest credit, helping families avoid the cycles of debt that predatory lenders so often create. Since its launch in 2008, Lending Circles has provided more than $15 million in credit-building loans and saved households more than $2.7 million in predatory fees and interest.
Every dollar lost to high-interest loans or excessive fees is a dollar that cannot be spent on rent, groceries, transportation, or other basic needs. By partnering with MAF, organizations can help ensure that families like Elson’s and Cecilia’s have access to safe, affordable financial tools that strengthen their financial stability and create pathways to greater opportunity. Learn more about partnering with MAF to bring relevant, community-centered financial products to the people you serve.
¹ Throughout this post, the terms “MAF clients” and “the families MAF serves” refer to applicants to MAF’s Lending Circles program.
² Total savings reflect the difference between what Lending Circles participants actually repaid and what they would have paid under a representative predatory short-term loan (modeled at a 36% annual percentage rate plus a $20 flat fee).
Millions of households across the country are grappling with higher prices at the grocery store, the gas pump, and in the housing market. In May of this year, the U.S. annual inflation rate reached its highest level in three years, placing renewed financial pressure on families already struggling to make ends meet.
Inflation affects everyone, but not everyone experiences it equally. Savings, appreciating assets, and wages that keep pace with rising prices help cushion the impact for many households. But low-income families often lack those buffers and access to affordable financial products designed to meet their needs. As a result, rising costs place a disproportionate burden on households with the fewest resources.
Despite the grave impact on their financial lives, the experiences of low-income families are often missing from the broader conversation about inflation. Understanding how rising costs are affecting their lives is essential for identifying the kinds of support families need to move forward.
Over the next three blog posts, we will explore that reality by analyzing a significant subset of MAF Lending Circle client records, revealing both the challenges families face and the strategies they use to navigate them.
The Data Behind This Series
In 2008, MAF launched Lending Circles, offering zero-interest, credit-building loans through community-based peer lending groups. Designed for low-income and immigrant families who are often excluded from the mainstream financial system, Lending Circles provides a safe alternative to high-cost debt while helping participants build the credit history they need to pursue long-term goals, such as starting a business, buying a home, or purchasing a car.
Although Lending Circles was designed to meet the needs of families who face the greatest barriers to affordable credit, its benefits extend far beyond any one group. By designing for those at the margins, MAF created a financial product that serves people across a range of racial, ethnic, and economic backgrounds. Over the years, MAF has accumulated a wealth of client data that sheds light on how families navigate an increasingly challenging economy. This blog series draws on Lending Circles application data collected between 2016 and 2024 to explore those experiences.
Lending Circles at a Glance
Cumulative program statistics, 2008 through 2026:
24,000+ Lending Circle Applications
The analyses in this series are based on subsets of 11,220 and 6,390 Lending Circle applications from MAF and nine partner organizations that participated consistently throughout the study period.
40+
States Offering Lending Circles
MAF partners with organizations across the country to expand access to Lending Circles. This insights series draws on data from applicants across 34 of 40 states.
100+
Lending Circle Partners
MAF has partnered with more than 100 community organizations to bring Lending Circles to communities nationwide. Our analysis includes Lending Circles applications submitted through 9 of our partners.
Sample Characteristics
The analyses in Earning More, Affording Less and Falling Behind the Neighborhood are based on a subset of 11,220 Lending Circles applications submitted between 2016 and 2024. The analysis in the final blog of the series, Finding a Way Forward, draws on a subset of 6,390 applicants who completed an entry survey in addition to the application.
Across both samples, the demographic profile of Lending Circles applicants has remained remarkably stable. Household income distributions, as well as applicants’ gender, geographic distribution, household size, race, and immigration status, have remained largely unchanged. The following figures describe the full sample of 11,220 Lending Circles applicants.
2
Median Household Size
$43,200
Median Household Income
66%
Reside in California
63%
Female Applicants
37
Median Applicant Age
A Consistent Population Across Years
While we intentionally control for demographic characteristics in our analyses to ensure that the patterns we observe are driven by genuine changes in the lives of the families applying to MAF’s Lending Circles program, we see that the breakdown of these characteristics is relatively stable over time.
What’s Next
The families MAF serves have been living through an affordability crisis for far longer than the past few months. Over the next three blog posts, we’ll examine how financial pressures have evolved over the past decade and why low-income households are especially vulnerable to rising costs. Together, these stories show how long-standing economic disparities have made today’s affordability crisis particularly difficult for the families MAF serves.
In Earning More, Affording Less, we show how inflation has erased a decade of wage gains. In Falling Behind the Neighborhood, we examine how the gap between our clients and their local communities has widened even as their incomes have grown. Finally, in Finding a Way Forward, we explore how families are responding by working, building businesses, leaning on one another, and holding on to hope.
Follow along as we share what a decade of data tells us about the families we serve. Start the series by reading Earning More, Affording Less.
Data source: MAF Lending Circles applicant records, 2016–2024. Questions about our data or methodology? Please reach out via our contact form.
We’re excited to announce the release of a new feature in MyMAF to support clients on their journey toward self-employment.
In September, the MAF Lab launched a new education content module in MyMAF app called How to be self-employed – alongside the launch of our MAF’s new 0% interest loan program to help people formalize self-employment into an LLC. This new product feature and program are both important parts of MAF’s broader efforts to support the innovations our clients develop in order to navigate their financial lives and formalize their business to generate steady income.
MyMAF’s How to be self-employed module combines education with tools to take action.
The new module covers all aspects of starting a small business, including setting a vision for self-employment, building a business model, formalizing self-employment through LLCs, and managing time as an entrepreneur. It’s the fourth financial education content module available in the app, adding to ones on credit, savings, and preparing for emergencies.
Our staff in-house wrote the content building on their expertise in supporting entrepreneurs to start their own business. We also sought the feedback from our peers at nonprofits who similarly strive to support entrepreneurs. Similar to MyMAF’s other financial education modules, How to be self-employed pairs expert content with recommended action items and resources to give individuals tangible tools to get started.
We aim to continue to support the creativity of our clients to create sustainable income solutions.
Now we’re going even further: Through these past ten years, we have gathered invaluable data and insights from people’s financial lives. With a vast dataset on how people manage to survive and thrive under the most difficult circumstances, we are turning our research insights into actionable lessons for the field.
We’re celebrating this holiday season by sharing some insights that stood out to us.
We hope you enjoy MAF’s 12 Data Points of Christmas:
MAF is excited to announce the launch of its new mobile app, MyMAF. MyMAF is a virtual financial coach designed to help low-income and immigrant families achieve their dreams and help MAF’s clients succeed financially in our programs.
We’ll be celebrating the launch of the MyMAF app, the MAF Lab’s first fintech product, on December 7th. Join us for the launch party to view a demo of MyMAF and learn about the inspiration for its development, from idea to fruition.
MyMAF fills an unmet need for the communities MAF serves.
Since day one, MAF’s goal has been to build pathways that allow hardworking families to realize their full economic potential. MAF’s seminal Lending Circles program has helped clients achieve their financial goals by building credit, but we’ve always had a larger vision to support our clients’ financial lives across their hierarchy of financial needs. We found financial coaching to be one of the most effective mechanisms to help people achieve their goals. However, in-person coaching is often resource intensive (for both coaches and clients) and difficult to scale. We realized that we could use the power of technology to bring financial coaching to more people in our community and serve their needs in a deeper way.
With MyMAF, members of our community are now able to obtain essential financial information and coaching at the reach of their fingertips.
We meet people where they are, not where we think they should be
We build on what people have, no matter the shape or size
We respect the diverse communities we serve and recognize their hidden strengths
These values have informed the development of MAF’s programs and products from the beginning; they are also the foundations of this new app.
To meet clients where they are in their financial journey, we first recognize that our clients’ financial lives are inseparable from their complex backgrounds and personal aspirations. For example, a client without a Social Security Number has to take a different path for doing something as seemingly simple as pulling their credit report or applying for a credit card. An important goal of the app is to remove the stress from financial planning and help clients recognize that this is a tool to help them achieve their dreams. This is done at their convenience, allowing clients to decide when and where they plan and update personal financial goals – whether at home, waiting for the bus, or any other moment in their busy lives. As an added engagement feature, clients can interact with a virtual financial coach and receive financial tips and tricks to keep in mind as they navigate their journey with MyMAF. By building for clients’ unique contexts, MAF sets the stage for personal finance to feel empowering.
To respect our clients as the experts in their own lives, MyMAF gives clients the autonomy to direct their financial journey. Clients decide where they want to begin, whether it’s learning about credit or watching a video about exploring their investment options. The app also gives clients the option of choosing from 70+ action items to work towards, providing clients with a structure to create their own action plan. The app empowers clients to set the agenda based on what is most relevant to them and supports them with resources, tips, and motivation to get to their goal.
To build on our clients’ strengths, the app takes inspiration from what clients are already doing to manage their financial lives. Much like Lending Circles, the tips and action items in the app reflect informal strategies that clients currently use to overcome their financial barriers. This app gives clients the ability to choose from a wide breadth of options that are already working for them, rather than prescribing choices that don’t fit their contexts.
The author (R&D Lab Director) and UX/UI Designer test a prototype of MyMAF with a client.
MyMAF was built using evidence-based principles.
The MAF Lab, Mission Asset Fund’s R&D team, is committed to building products using design thinking, the industry standard for product development teams. Based on conversations with clients and MAFistas who have worked in this community for years, we identified the unique painpoints that our clients experience that other products don’t help them address. We then built and tested prototypes of the app’s features with 40+ users in Spanish and English, iterating those designs until we got all the details just right. Here’s the MAF Lab process we followed:
This process helped us identify and build features in the app that distinctly serve our clients. For example, during our user discovery process, we learned that some of our bilingual clients wanted the flexibility of accessing resources in both English and Spanish. To address this, we made the app available in both languages with the ability to easily switch between the two. The process for launching MyMAF app is one we plan to continue following in-house to develop new products and programs.
Lastly, evidence about effective financial coaching influenced the structure of MyMAF. Research shows that financial education is not sufficient to motivate behavior change; education must be tied to action. MAF incorporated this principle into the design of the app by placing action items after educational content to mirror users’ mental models of creating financial plans – and by sending motivating reminders to encourage users to stay on track with their financial plans. These design elements nudge clients to most effectively realize their financial goals.
MAF is built from the community, for the community.
By involving users in every step of our process, we sought to recognize the unique cultural background of our clients through the app.
MAF’s 10 years of serving low-income and immigrant families was foundational to developing the app.For example, our in-house client services team wrote all the content in our app, to address the questions they have been hearing in working with the community. For example, we offered users tips to help our clients answer questions like “How do I protect my finances if a family member is deported?” and issues like what steps to take when sending a money transfer to family or friends outside the U.S.
MAF also designed the app to make our clients feel seen. MyMAF includes avatars, created by a designer from Mexico City, that reflect the faces of the diverse communities we serve. The app also includes photographs of real clients taken by our in-house designer and resident photographer. When we tested the app, the images were the first thing many clients noticed. Many told us that they identified with the people represented on the home screen and in the photos. This emotional connection to MyMAF will likely motivate our clients to continue engaging with the app’s financial tools.
Avatars in MyMAF to represent the community MAF serves
We’re just getting started.
MyMAF is a continuously improving product. We’re excited to get the app in the hands of our clients and hear their feedback as they use the app. We’re also measuring app usage and financial outcomes, to test our assumptions about the impact the app will have. Based on what we’ve learned so far, we’re already working on creating MyMAF 2.0 to give users more targeted tools to help them achieve their financial goals and make MAF’s financial products more broadly accessible.
Our plan is to continue iterating MyMAF to financially empower the low-income and immigrant families we serve nationally.
We also want to thank the philanthropic supporters of MyMAF: JPMorgan Chase Foundation, Tipping Point Community Foundation, Capital One, Twilio, and individual donors across the country.
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