Bloom Money, a U.K.-based fintech, has raised £1 million to digitize an informal financial management system employed by ethnic communities across the world.
Often referred to as “rotating savings and credit association” (ROSCA), the microcredit system varies in the details around the world, but usually, it involves an informal gathering of people from a certain community who act as a bank, collecting and saving money that members can withdraw. The system is called different names across the world, such as “hagbad” in Somalia or “pardna” in parts of the Caribbean.
The goal is to avoid conventional banking systems, many of which discriminate against minority communities, especially in the U.K., CEO Nina Mohanty said. “Some of it is just blatant racism. We don’t have clear red-lining like in the U.S., but there are definitely postcode look-ups,” she said.
The ROSCA system is a way to conduct financial matters with people you...
