Daly City, CA – ‘Demo Day’ September 10th found eight selected teams presenting creative technical solutions to a panel of evaluating experts during FDIC’s first-ever Tech Sprint designed to explore new technologies and techniques to help banks meet the needs of unbanked customers and challenged participants to identify resources and tools to sustain those banking relationships over time. Three winners emerged in separate categories based on Creativity, Effectiveness/Impact, and Market Readiness. The NAAC-Talino Finance team won in Market Readiness based on the creative and practical concept of social borrowing circles which has been around for decades. Faith Bautista, CEO of the National Asian American Coalition (NAAC) began its presentation describing the current situation. NAAC CDFI’s approach in giving very small dollar loans through a social borrowing circle digital platform will enable everyone to win in the fight to significantly narrow the gap between income and wealth inequality. In recent years, there were about 492,000 new small businesses established. Yet as of April 2021, 34% of these closed. One can imagine the consequences and impact this created on families and individuals and their financial inclusion status. This is the circumstance that NAAC-Talino Finance team addressed in its innovative presentation on Demo Day; and it begins with helping the small businesses that do not fit the box of lending institutions. It is a solution that is creative, out-of-the-box, and impactful.
Comprised of individuals who collectively take out a loan, this tried-and-tested mechanism provides LMI communities access to much-needed credit at more affordable rates while allowing them to build up their credit scores. NAAC CDFI and Talino Venture Labs teamed up and will create a digital social borrowing platform — as early as the end of this year 2021 — to scale the success of this model, ultimately empowering communities and improving their economic security.
Talino Venture Labs’ CEO, Winston Damarillo, explained: “Social borrowing circles have been tried and tested in emerging markets for half a century now, popularized by the Grameen Bank in Bangladesh and scaled worldwide. We’ve also proven it to work in the Philippines, where repayment rates average 97%, aided by a strong social network and now accelerated by technology. NAAC-Talino Finance team’s win in the market readiness category shows that our work in emerging markets can also address the financial inclusion gap in the US, given that we have 68 million unbanked adults closer to home. While we’ve been exporting ideas from Silicon Valley out to the world, there’s also an opportunity for us to bring in ideas from emerging economies to enable economic inclusion and mobility for more Americans.”.
After the win was announced by Rodney Hood of the National Credit Union Assn (NCUA), one of the evaluating experts, Ms. Bautista delightfully and emotionally expressed: “It has been my mission for twenty years to create a solution to help the unbanked and underbanked. We all know that it is expensive to be poor. Bringing this proven concept to life in the form of a digital social borrowing platform for micro-to-small businesses can ultimately address a wide portion of the remaining seven million unbanked households in America.”.
The NAAC and Talino Venture Labs announced their recent partnership that will improve NAAC CDFI’s SBA-approved Microloan Intermediary Lender capabilities as well as its IBank-guaranteed small business lending. “We are truly honored to be partnered with the National Asian American Coalition (NAAC) under the leadership of Faith Bautista, who have been working tirelessly for decades to give financial access to minority and underserved communities. This win, under no less than the Federal Deposit Insurance Corporation (FDIC), affirms NAAC’s mission and validates our concept of using group credit scores to bring more underserved communities closer to credit-worthiness. This is certainly a mission worth innovating for.” said Mr. Damarillo, equally excited at what this win catalyzes on.
Two other teams that won in Creativity and in Effectiveness/Impact categories were announced today by the FDIC. Click here for more.
The National Asian American Coalition (NAAC) is a US Dept. of Treasury Certified CDFI and a HUD-Approved 501(c)(3) nonprofit Housing Counseling Agency providing its services to over 18,000 minority families in diverse communities throughout California by preparing clients for mortgages and becoming sustainable homeowners. As an approved SBA Microloan Intermediary Lender and IBank-guaranteed lender, NAAC is a resource by qualified small businesses & non-traditional borrowers for access to capital and other financing options to assist underserved communities.
NAAC CDFI and Talino Venture Labs, A global fintech venture studio, entered an agreement to deliver a digital lending platform for small and medium sized businesses owned by Low to Moderate Income (LMI) entrepreneurs. The NAAC-Talino platform automates the onboarding, underwriting, disbursement and servicing of low cost and highly accessible loans. The platform aims to provide fair capital to accelerate the economic recovery of small businesses.