Released: May 14, 2007

Poverty business: profiting from the working poor

Source: Brian Grow & Keith Epstein, BusinessWeek

Roxanne Tsosie decided in late 2005 to pull her life together. She was 28 years old and still lived in her mother’s two-room apartment in a poor neighborhood in southeast Albuquerque known as the War Zone. She survived mostly on food stamps and welfare. The Tsosies are Navajo, and Roxanne’s mother wanted to move back to a reservation in western New Mexico where the family has a dilapidated house lacking electricity and running water. Roxanne, unmarried and with four children of her own, could make out her future, and she didn’t like what she saw.

With only a high school diploma, her employment options were limited. She landed a job as a home-health-care aide for the elderly and infirm. It paid $15,000 a year and required that she have a car to make her rounds of Albuquerque and its rambling desert suburbs. A friend told her about a used-car place called J.D. Byrider Systems Inc.

The bright orange car lot stands out amid a jumble of payday lenders, pawn shops, and rent-to-own electronics stores on Central Avenue in the War Zone. Signs in Spanish along the street promise “Financiamos a Todos"—Financing for All. On the same day she walked into Byrider, Tsosie drove off, jubilant, in a 1999 Saturn subcompact she bought entirely on credit. “I was starting to think I could actually get things I wanted,” she says.

In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. 

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