Fig,
a mission-driven FinTech company that offers credit building
alternatives to predatory loans for low-income borrowers, has become the
first-ever FinTech company to become both a Certified B Corporation and
federally certified Community Development Institution (CDFI). VilCap
Investments and Techstars are early Fig Loans investors.
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CDFIs are certified by the U.S. Department of the Treasury’s Community
Development Financial Institutions Fund. In order to become a certified
CDFI, a financial institution must have a primary mission of promoting
community development; provide financial products and services; serve
one or more defined low-income target markets; and maintain
accountability to the community it serves. Many CDFIs are community
development banks and credit unions; a select few non-regulated
institutions like lenders and venture capital funds receive the
designation.
Fig, founded in 2015 by Jeff Zhou and John Li, uses predictive analytics
to provide low-cost credit and credit-building financial products to
populations unable to access traditional forms of credit. Their mission
involves helping borrowers build credit and transition into mainstream
credit products. Founded in Houston, they have long partnered with the
United Way of Greater Houston to identify borrowers who would otherwise
resort to payday, title or pawn shop loans.
“Some startups go with ‘move fast and break things’ or ‘apologize rather
than ask permission’,” says Jeff Zhou, co-founder of Fig. “Our approach
is more community driven. Our value is that we want to be a community
player in markets where we’re present. That’s how we build trust.”
VilCap Investments Managing Director Victoria Fram has written that
Fig’s partnerships with nonprofits sets them apart in the crowded field
of consumer credit and serves as a validator for mission-driven
investors.
“There’s an ever-present risk that’s familiar for anyone who invests in
startups solving complicated problems in low-income communities: it’s
possible for a business to become part of the problem, rather than
solving it,” Fram says. “We’ve always appreciated that Fig is working
with nonprofits and community organizations to make sure they meet
customer needs. Their model is a good sign that they are helping solve
the problem of predatory lending, rather than becoming part of it.”
“At Techstars, we believe that corporate citizenship is just good
business, and we chose to operate as a Certified B Corporation because
of our commitment to #givefirst. We know the Fig team shares that deep
commitment, and are incredibly proud of them for this achievement in
receiving the CDFI certification and being the first-ever FinTech
company to reach this historic level of social accountability,” says
Chris Devore, managing director of Techstars Seattle, where Fig was part
of the 2016 accelerator program. “This certification is further
validation of our original decision to invest in Fig.”
Certification is the next step for Fig to deepen its engagement with
traditional financial institutions. As a CDFI, Fig can help banks
fulfill their obligation to provide capital to underserved communities
through the Community Reinvestment Act. Fig will work with their
advisory board of nonprofit partners to select the most suitable banks
for long-term partnerships in each community.
About Fig Loans
Fig provides credit building products for consumers and financial
stability tools for community organizations. Started 2015 through a
collaboration with United Way of Greater Houston, Fig is a graduate of
Village Capital and Techstars in 2016 and has provided over $6.1M in
loans to underserved Americans. CDFI is the second major certification
for the FinTech company, which became a Certified B Corporation in 2017
and was honored as Best in the World for Consumers in 2018 by the B
Corporation certifying body B Lab. To learn more about the Fig’s
products visit www.figloans.com/about.
About Village Capital
Village Capital helps entrepreneurs bring big ideas from vision to
scale. Their mission is to reinvent the system to back the entrepreneurs
of the future. Their vision is a future where business creates equity
and long-term prosperity. Since 2009, they have supported more than
1,000 early-stage entrepreneurs through their investment readiness
programs. Their affiliated fund, VilCap Investments, has provided seed
funding to more than 100 program graduates.
About Techstars
Techstars is the worldwide network that helps entrepreneurs succeed.
Techstars founders connect with other entrepreneurs, experts, mentors,
alumni, investors, community leaders, and corporations to grow their
companies. Techstars operates three divisions: Techstars Startup
Programs, Techstars Mentorship-Driven Accelerator Programs, and
Techstars Corporate Innovation Partnerships. Techstars accelerator
portfolio includes more than 1,700 companies with a market cap of $18
Billion.
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