Black-owned Fintech firms provide black entrepreneurs with a variety of financial offerings

A notable Black-owned fintech company is Greenwood, a firm started by the rapper Michael “Killer Mike” Render and others. The platform, named after the Tulsa, OK community where Black Wall Street was once located, creates better financial options to support black and brown people and businesses.

Greenwood offers a variety of banking features, including checking and savings accounts with no overdraft fees, no in-network ATM fees and no minimum balances. In addition, Greenwood has raised more than $80 million in venture capital funding rounds to invest in and help black and minority entrepreneurs.

“Obviously, we need the broader capital markets to work more proportionately for black and brown people,” Pendulum CEO Robbie Robinsonwho led a $45 million equity financing round for Greenwood, said Forbes last year.

The rise of Black-owned fintech firms began in the early days of the pandemic when millions of Americans were laid off almost overnight and small business owners scrambled for Paycheck Protection Program funds to stay afloat.

During the pandemic, black businesses large and small struggled to get PPP loans from traditional banks, and black entrepreneurs became dependent on fintech firms and black-owned banks for loans. In accordance Washington Post, Black-owned small businesses were 70% more likely to get PPP loans from fintech firms than from traditional banks.

Everett Sandssaid the CEO of Lendistry, which provides grants to small and micro businesses in New York BLACK ENTERPRISE that black fintech firms offer new ways for black and minority entrepreneurs to get the financial and technical resources they need at almost every stage of their entrepreneurial journey, something big banks may not be interested in.

“I think it’s great,” Sands said. “I think the more vehicles we have in terms of access to capital, the better. I think they will be a cultural competency that we will see that allows some of these lenders to adapt to the needs of our community as well, and that can lead to things like alternative credit models and maybe an alternative process to how we provide access to capital so as well as the basics of responsible lending so that our communities don’t have to turn to predatory lending and other sources that may not act responsibly.”

Sense of community

Black-owned fintech firms also provide their customers with a sense of community. Many Black fintech platforms include memberships with events, meet-and-greets and happy hours that bring Black entrepreneurs together to share ideas, collaborate and support each other.

“That’s the core of our mission at Guava and the core of our value that we see in this space, and ultimately it really brings us back to the concept of the benefit that nesting with other entrepreneurs has on their business,” Kelly Ifill, the founder of Guava told BLACK ENTERPRISE.

“Entrepreneurship is lonely, so it is important to bring people together to fight, but it is also an experience that is misunderstood and to be able to bring entrepreneurs at different stages together so that they can learn from each other and the people who come behind more mature entrepreneurs on the journey, can learn from those experiences and can jump, and so I think that’s what we’re really talking about when we say what is the value of community.”

Financial competence

Many black fintech firms also educate their customers and the Black Community about the ins and outs of money.

Qoins, a Black-owned fintech company started by co-founders Chris Zimmerman and Nate Washington Jr., helps users pay off student loan and credit card debt for $1 a month. Qoin’s website also has a section on the website with lessons and tips on saving money, entrepreneurship, credit and debit cards and more.

Meanwhile, Breaux Capital, which was started by HBCU students Derrius Quarles, Race Asand Brian Williams, tailored for black men, but open to all. Breaux Capital provides its clients with financial literacy education, investment opportunities and events that bring business owners, entrepreneurs and young professionals into the community.

Other notable fintech firms serving black and minority customers and entrepreneurs include Goalsetter, which teaches children about financial literacy, among other things; EnrichHER, a fintech investment platform started by Dr. Roshawnna Novellus which promotes the growth of women-owned businesses by enabling female founders to secure capital; SpenDebt, which helps its customers pay off debt through micropayment amounts the customer specifies and Novae Grants, a new tool that allows users to search a database of thousands of financial assistance opportunities from both the government and the private sector