Kashable wants to make financial wellness benefits accessible to BIPOC
As an international student at MIT, Rishi Kumar himself had no access to banking resources. As the founder of the financial wellness platform Kashable, he hopes to help other minorities build solid financial foundations and bring more equity into the financial services industry.
Providing financial education, low-cost credit and credit checks, Kashable works with corporations and human resources departments to bring this resource directly to employees.
“We have to figure out how to get the whole population involved in institutional funding,” says Kumar. “We need to build things like their creditworthiness and see how it can improve them.”
Many minorities are underserved in the current financial system – often penalized by high interest rates and unable to improve their creditworthiness. According to the 2020 Home Mortgage Disclosure Act data, lenders are denying mortgages to black applicants at an 80% higher rate than white applicants.
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After the 2009 crisis, approval rates for required credit ratings for loan approvals rose, according to the US Census Bureau. Predominantly black and Hispanic zip codes were under approval lines. The pandemic has only exacerbated the problem: many minority communities are below the proverbial dashed line.
With Kashable, companies can see past low credit scores and expand their service offerings to include those who are either excluded from banks and market lenders, or worse – fall victim to their high interest rates and premiums.
Kashable integrates directly with companies’ HR and payroll systems so employees can easily repay their loans like any other benefit. The financial wellness platform also prevents borrowers from exceeding the amount they can – or should – apply for. The dollar amount Kashable borrows is based on what the employee can afford based on their own HR data, not what the employee thinks is necessary.
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The provider also aims to improve the financial literacy and practices of individuals, according to Kumar. Employees must repay their first loan in full before they can take out another loan. In addition, they are in the process of incorporating live financial coaches as educational resources for their clients.
While loans are available to all employees, minority groups make up more than half of all applicants at Kashable: 34% are black, 14% are Hispanic, and 3% are Asian borrowers, according to Kashable. These data indicate that these groups are not getting equal opportunities from the financial services industry, says Kumar.
“Often times, the communities that are underserved are the ones that need more,” says Kumar. “All we had to do is stop suppressing them and include them within our reach.”
Employers have expanded their financial wellness benefits in the wake of the pandemic.
Employees turn to their companies to fill knowledge gaps in their finances, which has led to changes, such as the TransAmerica Center for Retirement Studies.
“Employers need to understand their place in employees’ lives when it comes to things like retirement planning or offering a health protection network,” says Kumar. “We have to find a way to increase those on the other side of the dashed line or else they’ll never get to a place where they have equal access to financial markets.”