One notable Black-owned fintech company is Greenwood, a firm started by rapper Michael “Killer Mike” Render and others. The platform, named after the Tulsa, OK community where Black Wall Street once stood, is creating better financial options to support Black and Brown people and businesses.
Greenwood offers a number of banking features including checking and savings accounts with no overdraft fees, no in-network ATM fees, and no minimum balances. Additionally, Greenwood has raised more than $80 million in venture capital funding rounds to invest and help Black and minority entrepreneurs.
“Obviously, we need the broader capital markets to work more proportionally for Black and Brown folks,” Pendulum CEO Robbie Robinson, who led a $45 million capital funding round for Greenwood, told Forbes last year.
The rise of Black-owned fintech firms began during the early days of the pandemic when millions of Americans were laid off almost overnight and small business owners were scrambling for funds from the Paycheck Protection Program to stay afloat.
During the pandemic, Black businesses large and small struggled to get PPP loans from traditional banks leaving Black entrepreneurs to rely on fintech firms and Black-owned banks to get loans. According to The Washington Post, Black-owned small businesses were 70% more likely to get PPP loans from fintech firms than from traditional banks.
Everett Sands, the CEO of Lendistry, a small business lender that provided grants to small and micro businesses in New York during the COVID-19 pandemic, told BLACK ENTERPRISE that Black fintech firms are providing new ways for Black and minority entrepreneurs to get the financial and technical resources they need at almost every level of their entrepreneurial journey, something big banks may not be interested in.
“I think it’s great,” said Sands. “I think the more vehicles we have in terms of access to capital the better. I think they’ll be a cultural competence that we’ll see that allows some of those lenders to adjust according to the needs of our community as well and that can lead to things such as alternative credit models and maybe an alternative process to how we provide access to capital as well as the basics of responsible lending so that our communities don’t have to go towards predatory lending and other sources that might not act responsibly.”
Sense of community
Black-owned fintech firms are also providing their clients with a sense of community. Many Black fintech platforms include memberships featuring events, meet-and-greet,s and happy hours that bring Black entrepreneurs together to share ideas, collaborate and support each other.
“That is core to our mission at Guava and core to our value that we see in this space and in the end, it really brings us back to the concept of the benefit that nesting with other entrepreneurs have on their business,” Kelly Ifill, the founder of Guava told BLACK ENTERPRISE.
“Entrepreneurship is lonely and so to bring people together to combat that is important but it’s also an experience that is misunderstood and being able to bring entrepreneurs at different stages together so they can learn from each other and the folks that are coming behind more mature entrepreneurs in their journey, can learn from those experiences and can leapfrog and so I think that’s what we are really talking about when we say what’s the value of community.”
Financial literacy
Many Black fintech firms are also teaching their clients and the Black Community about ins and outs of money.
Qoins, a Black-owned fintech firm started by co-founders Chris Zimmerman and Nate Washington Jr., helps its users pay off student loans and credit card debt for $1 a month. Qoins website also features a section on its site with lessons and tips on saving money, entrepreneurship, credit and debit cards, and more.
Meanwhile, Breaux Capital, which was started by HBCU grads Derrrius Quarles, Ras As, and Brian Williams, tailors to Black men but is open to everyone. Breaux Capital provides its clients with financial literacy lessons, investment opportunities, and events bringing business owners, entrepreneurs, and young professionals into its community.
Other notable fintech firms serving Black people and minority customers and entrepreneurs include Goalsetter, which among other things, teaches financial literacy to children; EnrichHER, a fintech investment platform started by Dr. Roshawnna Novellus that pushes the growth of women-owned businesses by enabling female founders to secure capital; SpenDebt, which helps its clients pay off debts through micropayment amounts the client sets and Novae Grants, a new tool allowing users to search a database of thousands of financial assistance opportunities from both the government and the private sector