The Silicon Review
The issue of wealth inequality and the importance of building intergenerational wealth is as relevant as ever in the past, if not more so, as the wealth gap widens. Within Black & Brown communities, 50% to 55% of people are unbanked or under-banked, which is a factor in the widening wealth gap. We are witnessing how economic inequality has negative impacts in all areas of society, and New York-based MoCaFi has a role in closing the gap. As the urgency to narrow the economic disparity becomes greater, MoCaFi is seizing the moment to expand the national dialogue on social justice. They are developing a blueprint of innovative solutions to bring to the conversation and spur action.
In 2014, when Ferguson, Missouri, erupted in protests following the shooting death of an unarmed Black teenager, Wole Coaxum, an Oxford-educated African American financial executive, sat in his office at a Fortune 100 company and considered ways to offer economic justice to disenfranchised communities such as Ferguson. Two years later, he launched MoCaFi as a high-quality financial services platform that would target more than 50 million unbanked and underbanked people in the country. The platform continued to grow through the pandemic. “We developed from seven employees to more than 40 and expanded from one prepaid card to more than five financial products,” said Wole Coaxum, Founder and Chief Executive Officer of MoCaFi.
We interviewed Mr. Wole Coaxum to know more about the company’s vision. In this interview, he talked about MoCaFi’s idea of innovation and more. Read on for the excerpts from the interview.
Q. How can one build wealth with MoCaFi?
MoCaFi presents multiple paths to wealth creation, both for the MoCaFi member and the local stores where members spend their money. At the individual level, we offer bank accounts that enable our members to save money and avoid predatory institutions such as check cashing services that charge excessive fees. The average Black or Brown individual pays $50 to $100 more on banking services than their white counterpart. At the same time, the lack of a low-cost, high-quality bank account can cost the average Black individual $40,000 over their lifetime. Our platform eliminates the dependency on exploitive alternative financial services and allows users to reinvest that money in education, homeownership, or other investments. The MoCaFi personal accounts also provide credit building services to help customers qualify for low-interest loans. 60% of African Americans are renters, and reporting rent to the credit bureaus can increase one’s credit scores to 650 or 700, thereby allowing many new families to achieve homeownership. Additionally, MoCaFi supports small businesses and encourages the circulation of money within local communities. When money is spent locally, entrepreneurship thrives, and neighborhoods improve when local companies can provide employment and quality products.
Q. How are you specifically catering to the needs of Black & Brown American businesses?
Black & Brown businesses form the backbone of our economy, and entrepreneurs are foundational in progress towards wealth creation and economic equity. Unfortunately, many small businesses were forced to shut down in the wake of the pandemic, and Black & Brown businesses were disproportionately overrepresented in this extinction. In response, MoCaFi is developing tools to strengthen the entrepreneurial class and help enterprises become adequately banked. Black & Brown businesses can benefit from this service by improving their structural efficiency and increasing their access to capital.
Tell us about MoCaFi’s work culture.
We emphasize the journey and continual improvement of our work. Our philosophy is that every employee will contribute their total effort when their voices are heard and respected. Employees at MoCaFi are passionate about the mission because they recognize the value and meaning of their contributions. We never take the team’s engagement (interactive even in a digital COVID environment) and loyalty to the company for granted. We’re a diverse-led team of financial executives, technologists, community organizers, activists, and makers committed to breaking barriers to wealth building for all people, regardless of race, circumstance, or financial position. We pride ourselves in having no diversity committee because the composition of our team is inherently inclusive, with diverse thoughts and backgrounds in both the company leadership and team members.
Q. Do you have any new services ready to be launched?
Over the upcoming months, we will focus on products and services that allow users on our platform to move closer to homeownership and entrepreneurship. MoCaFi has partnered with Rocket Mortgage to offer Detroit residents the tools necessary to prepare for homeownership. In Q1 2022, we will be launching Rent-2-Home, a program designed to increase Black homeownership through a multi-tiered platform. MoCaFi is engaged with federal agencies to explore ways to build on partnerships with CDFIs and MDIs. We are also in dialogue with federal agencies about how our product can effectively assist with outreach during national emergencies or crises. Finally, we are designing a small business banking platform that will offer the digital economy through bank account services. This platform will also provide financial tools to help them improve the financial acumen they manage their business; education and coaching on business fundamentals, including credit score improvement, and applying for—and manage—lines of credit.
Q. How have you innovated to adapt since the onset of the pandemic? How have you helped?
Since the onset of the pandemic, MoCaFi has partnered with cities and organizations to facilitate emergency cash disbursement to individuals struggling with financial burdens. At the pandemic’s beginning, MoCaFi had its original prepaid card, our Immediate Response Card (“IRC”). Since that time, our platform has broadened the capacity of the IRC card to include Guaranteed/Universal Basic Income programs; a fully featured Demand Deposit Account; a partnership with Rocket Mortgage® to provide its clients with the tools necessary to begin to build wealth and prepare for many financial milestones, including getting a mortgage; and a financial-services-as-infrastructure program to assist families with reaching their most challenged residents.
Most notably, in September, we kicked off the Angeleno Connect Bank Account program with Mayor Eric Garcetti. The Angeleno Connect program addresses many of the social and economic inequities laid bare by the pandemic. MoCaFi designed the card in response to the challenge of Mayor Eric Garcetti’s mandate to require many City services contactless in a municipality where nearly 20%, roughly 500,000, of its residents are unbanked. It is a program that the City can use to disburse financial assistance directly to residents, connect people to City services, and offer free financial services to Angelenos without a bank account.
Q. What inspires you every day to continue this work?
The fulfilling nature of the service we provide every day inspires me to continue this work at MoCaFi, and multiple concrete instances contribute to this fulfillment. First, at MoCaFi, we witness the positive financial impact on individuals’ lives across various cities as we provide quality service to our clients. Second, in his speech to announce the Angeleno Connect Bank Account, we were delighted to hear Mayor Eric Garcetti refer to the Angeleno Connect as the most important thing he’s done as an elected official. It is very satisfying to have the opportunity to help governments become efficient in improving society. Third, as a company, we can create opportunities through our hiring process to support career development. The synergy of these results and options is the source of my inspiration. Lastly, the knowledge that we are building a great company and a lasting legacy in the communities that we care so much about motivates us at MoCaFi to work tirelessly towards an equitable future.