NEW YORK--(BUSINESS WIRE)--
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.
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.