A number of years ago, a financial-industry colleague of mine and I devised a consumer-finance alternative to check-cashing services, payday loans, and rent-to-own stores.

The plan we developed was designed to provide a gateway to capital for consumers with limited assets and low income.

Our inverse principle was that everyone, no matter how poor, owns something of value. and the poorer the consumer the more valuable that thing is to him. And if that thing were used to collateralize a loan, the more likely the borrower would be to repay the loan.

What is needed is a forward-thinking financial institution willing to extend credit based on such collateral. Since the collateral, whether an old car, a personal assistant, or a mobile phone is the one thing that allows the consumer to tolerate his poverty, it would be highly unlikely that he will default on the small loan.

This will allow the borrower to escape the maw of check cashers, payday lenders and and others in the non-bank financial-service industry that provide capital to poorer consumers at an unbearable cost. Under this scenario, there is no vig, no hidden cost to the borrower.

The financial institution could be a bank, credit union, or even a check casher.