Race and Social Problems

, Volume 11, Issue 2, pp 149–160 | Cite as

Exploring Racial/Ethnic Disparities in the Use of Alternative Financial Services: The Moderating Role of Financial Knowledge

  • Kyoung Tae KimEmail author
  • Jonghee Lee
  • Jae Min Lee


Using the 2015 National Financial Capability Study dataset, this study examined the association between race/ethnicity and the use of alternative financial services (AFS) with the moderating role of financial knowledge. Results showed that blacks were more likely to use payday loans, pawnshops and rent-to-own stores than whites. Further, Hispanics were more likely to use payday loans and pawnshops, while Asians/others were more likely to use  payday loans compared to whites. The level of financial knowledge influenced different types of AFS use among racial/ethnic groups in a different way with a stronger moderating effect of financial knowledge on blacks and Hispanics than for whites. This study supports the important role of financial knowledge, especially for minority groups that need further attention for researchers.


Race Ethnicity Alternative financial services Financial knowledge National Financial Capability Study 



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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of Consumer SciencesUniversity of AlabamaTuscaloosaUSA
  2. 2.Department of Consumer Information StudiesKeimyung UniversityDaeguSouth Korea
  3. 3.Department of Family Consumer ScienceMinnesota State University, MankatoMankatoUSA

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