Black Entrepreneur creates credit-building app for underserved black and brown Americans
- Posted on February 16, 2022
- Technology
- By Glory
Entrepreneur and innovator Abbey Wemimo recently
created a credit-building app – Esusu – targeted at closing the racial wealth
gap in black and brown communities.
The startup has so far raised $130 million in venture
capital and has a market value of $1 billion, according to Forbes. Esusu is one
of the few black-owned startups to reach "unicorn valuation." It
offers many services and benefits to its customers. For example, capturing
rent-payment data and reporting it to major credit bureaus which renters can
use their rental history to boost credit scores.
“No matter where you come from, or the color of your
skin, your financial identity shouldn’t determine where you end up in the
wealthiest nation in the world,” Wemimo said.
When it comes to gaining access to credit services,
African Americans are the ones who struggle the most. Many get denied due to
several reasons. Decades of racial discrimination in the finance and banking
industry is the major factor to this denial, according to CNBC. Blacks are
usually faced with more difficulty when applying for credit or loans, most
times, they get denied.
The motivation to start Esusu came years after Wemimo
and his family arrived in the U.S. He has experienced a series of denial of
access to credit due to low credit scores. In 2009, his family was turned down
a loan, which caused his mother to pawn jewelry to settle their needs. Wemimo
was also turned down a loan to start a business, which drove him to create his
credit-building app from the scratch.
Esusu estimates that more than 45 million Americans do
not have a credit history, let alone have any means to build one. This has
hindered millions of underserved and underprivileged Americans from obtaining
loans to secure a house, car, and sometimes, a cell phone.
The platform doesn’t automatically help customers
increase their credit score simply through their rental histories and payments.
However, Esusu requires renters to pay an access fee of $50 and interest-free
loans related to rental issues. Property owners are required to pay $3,500 to
access the platform and $2 per unit per month to help manage risks associated
with renting a property. The startup currently has more than two million rental
units uploaded on its platform.
According to an investigation done by the National
Fair Housing Alliance, 60 percent of the time black and brown applicants were
more financially qualified for a loan compared to their white counterparts.
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