Innovation That Matters

Greenwood’s mission is to both provide funding to Black and Latinx businesses, and to promote social causes in the community | Photo source Greenwood

Digital bank focuses on Black and Latinx communities

Financial Services

A digital-only bank is helping Black and Latinx communities by donating to social causes and making banking products accessible

Spotted: According to data from the US Federal reserve, Black and Latinx-owned businesses in the United States are twice as likely to be turned down for loans as white-owned businesses. This is a trend that Michael Render would like to change. The rapper, who goes by the stage name of “Killer Mike”, has recently teamed up with former Atlanta mayor Andrew J. Young and entertainment pioneer Ryan Glover to found a black-owned digital bank.

The bank is named Greenwood, after the historic neighbourhood in Tulsa, Oklahoma that was known as Black Wall Street before it was destroyed in a racial massacre in 1921. Greenwood’s mission is to both provide funding to Black and Latinx businesses and to promote social causes in the community. The bank will offer savings and spending accounts, debit cards, Apple and Android pay, peer-to-peer money transfers, mobile deposits, and ATM accessibility, with no hidden fees.

For every account that is opened, Greenwood will donate meals to an organisation fighting food insecurity, and every time a customer uses a Greenwood debit card, the bank will make a donation to the United Negro College Fund or another charitable organisation. The bank will also give grants to Black and Latinx businesses each month.

Currently, Greenwood isn’t offering loans, but they do plan to in the future. Recent studies have found that banks charge communities of colour more for opening accounts and that Black mortgage applicants were denied at more than twice the rate of white applicants. Render states that “Black and working-class and Latino people—poor people—ain’t stupid. They know they’re getting scammed, but they don’t have an alternative since traditional banks have turned many of them down, or charged them more for checking accounts.”

Greenwood is a neobank and digital-only. As they have lower costs, neobanks also tend to charge lower or no fees. Neobanking and other types of financial products are increasingly being used to address social concerns; at Springwise, we have recently covered a credit card that lets LGBTQIA+ users choose the name they want to show on the card and an Indian digital bank that allows cardless cash withdrawal.

Written By: Lisa Magloff

Explore more: Financial Services Innovations | Nonprofit & Social Cause Innovations



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