July 18th 2023.
Black-owned fintech firm Stratyfy is hoping to shift racist practices against Black homebuyers. Stratyfy is using AI-powered machine learning solutions to provide credit underwriting decisions. They have now announced a huge partnership with Beneficial State Foundation (BSF), an advocacy group working to reduce racial disparities in the lending industry.
The Underwriting for Racial Justice program seeks to improve access to inclusive credit in the US. Stratyfy and BSF will launch a two-year pilot program to unlock capital for people of color. Co-founder and CEO of Stratyfy, Laura Kornhauser, is excited to be part of this “groundbreaking” initiative. She believes it is a step in the right direction to build wealth in communities that have been historically underserved and affected by racism.
Research by Brookings has found that Black borrowers are more likely to get high-interest loans, credit cards and mortgages than any other racial group. McKinsey & Co. have also found that banking services can save up to $40,000 in a lifetime for Black, Latino and Hispanic Americans. Erin Kilmer Neel, Executive Director and Chief Impact Officer at BSF, believes Stratyfy is the perfect partner to tackle these issues. She said Stratyfy's credit risk solution can help lenders make bold and meaningful changes, while still managing risk and meeting regulatory requirements.
The pilot program is being supported by vendors such as Beneficial State Bank, Community Vision, New Orleans Fireman’s Federal Credit Union, Twin Cities Habitat for Humanity Lending, Inc., Urban Redevelopment Authority, Vermont Community Loan Fund, Working Solutions CDFI, and Washington State Employees Credit Union. This is an important step towards fighting racism and providing financial opportunities for people of color.
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