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The App Where Strangers Lend Each Other Money · What's Your Problem?

0:15
Speaker 1: Pushkin.
0:20
Speaker 2: By twenty twenty, Nina Mohunty had been working in fintech
0:24
Speaker 2: in financial technology for several years. She'd worked at MasterCard.
0:29
Speaker 2: At this point, she was working at Klarna, the buy now,
0:32
Speaker 2: pay later company, and she was working for them in London,
0:35
Speaker 2: and she started paying attention to what seemed like a
0:38
Speaker 2: big underserved market for financial technology immigrants. There were, of course,
0:44
Speaker 2: lots of tools for immigrants to send money home right,
0:47
Speaker 2: lots of tools for remittances, but it didn't seem like
0:50
Speaker 2: anyone was creating financial tools to help immigrants save money
0:54
Speaker 2: in the UK where they were for themselves.
0:57
Speaker 3: So I went down the rabbit hole and I spoke
1:00
Speaker 3: to anyone that was speak to me. People often say
1:04
Speaker 3: that I have the personality of a golden retriever. It
1:08
Speaker 3: just speaks to anyone. I was going up to people
1:10
Speaker 3: and saying, you know, bus drivers on their cigarette bricks
1:13
Speaker 3: and asking them how are you managing your money? And
1:16
Speaker 3: I was going to cleaners and offices, and I was
1:18
Speaker 3: going up to you know, nurses. I was literally someone
1:23
Speaker 3: was taking blood and I was asking them about how
1:25
Speaker 3: they're managing their money. And these all became translated over
1:29
Speaker 3: time into post it notes that started to populate my wall,
1:34
Speaker 3: and it very much looked like that meme from Always
1:38
Speaker 3: Sunny in Philadelphia where He's got the red string. And
1:43
Speaker 3: I remember one day waking up and just looking at
1:46
Speaker 3: this wall, and because I had just moved back to
1:48
Speaker 3: the UK, I didn't have anything on my walls. It
1:50
Speaker 3: was like a barely furnished flat and I didn't have
1:56
Speaker 3: room for art on my walls because it was covered
1:59
Speaker 3: in screenshots of apps that already exist out there and
2:03
Speaker 3: what I thought they were doing well. It had notes
2:06
Speaker 3: of you know, a quote that someone said to me
2:08
Speaker 3: when we were having a chat and about how they
2:10
Speaker 3: wish they could do xyz And so that was my
2:15
Speaker 3: decor and that was ultimately what pushed me to start
2:19
Speaker 3: my business Blue Money.
2:27
Speaker 2: I'm Jacob Goldstein and this is What's Your Problem, the
2:29
Speaker 2: show where I talk to people who are trying to
2:31
Speaker 2: make technological progress. My guest today is Nina Mohunti, the
2:35
Speaker 2: founder and CEO of Blue Money. As you'll hear, Nina
2:39
Speaker 2: wound up creating an app based on a savings and
2:42
Speaker 2: credit system that has been used around the world for
2:45
Speaker 2: a thousand years, literally a thousand years, And she told
2:49
Speaker 2: me she hopes to build on this thousand year old
2:52
Speaker 2: tradition to eventually create an international financial powerhouse.
2:57
Speaker 3: So the problem that I kept coming across is people
3:01
Speaker 3: that are new to a country find it very, very
3:07
Speaker 3: difficult to actually integrate into the financial system. And there's
3:13
Speaker 3: a number of reasons for this. People might struggle to
3:17
Speaker 3: get access to credit because they don't have a credit score,
3:22
Speaker 3: and especially in the US and increasingly in Europe, your
3:26
Speaker 3: credit score determines a lot about what you can do,
3:29
Speaker 3: oftentimes if you can rent a place from a private landlord,
3:32
Speaker 3: for example, where you can get a job, So these
3:35
Speaker 3: are all things that are really important. It affects your
3:38
Speaker 3: ability to get insurance, right and if you're driving, you
3:42
Speaker 3: need car insurance most places. And if the financial system
3:48
Speaker 3: doesn't know who you are, because there's no pay per
3:52
Speaker 3: trail of you in this country, you're basically invisible to
3:55
Speaker 3: the financial system. And that's what I kept hearing over
3:59
Speaker 3: and over and over when I spoke to folks, which
4:01
Speaker 3: was I'm here, I have a bank account, but I
4:06
Speaker 3: don't know what is available to me, and I struggle
4:10
Speaker 3: to access other financial products. Okay, and when I do,
4:15
Speaker 3: if I get to that stage where I know what
4:18
Speaker 3: I want. I want a car loan. I can't because
4:24
Speaker 3: I don't exist, I don't have a credit score. So
4:26
Speaker 3: I'm going to just have a someone say well, computer
4:29
Speaker 3: says no, there's no car loan available for you.
4:32
Speaker 2: So okay, So this is the landscape that you're walking into.
4:36
Speaker 2: What do you decide to do?
4:39
Speaker 3: Yes. One of the things that kept coming out of
4:42
Speaker 3: these conversations was the presence of informal financial systems. And
4:49
Speaker 3: this was really intriguing to me. I come from an
4:51
Speaker 3: immigrant background, and one of the behaviors that kept coming
4:56
Speaker 3: up was a behavior that I recognized actually, in which
4:59
Speaker 3: groups of people would come together and pull their funds,
5:04
Speaker 3: often with their own social group. So you know someone
5:08
Speaker 3: that they see at the market, or they live on
5:10
Speaker 3: the same council estate together, or they see each other
5:14
Speaker 3: at church or mosque, and they would come together and
5:17
Speaker 3: pull their money and kind of increase their affordability for
5:21
Speaker 3: one person at a time within that group.
5:24
Speaker 2: Let's talk about this in some detail, because this is
5:27
Speaker 2: a very specific thing. Right, it has an academic name. Right,
5:32
Speaker 2: it's called the Rotating Savings and Credit Association absolutely ROSCA
5:37
Speaker 2: to its friends. Yes, and like it's actually One of
5:40
Speaker 2: the most interesting things to me about what you are
5:42
Speaker 2: doing is that it is this thing that is like
5:44
Speaker 2: a thousand years old. Literally yes, So so tell me specifically,
5:50
Speaker 2: like how does erosca work? Right, old school before you
5:53
Speaker 2: come along, old school.
5:54
Speaker 3: The way that this is work, this would work is
5:57
Speaker 3: I'm going to give you the example of my grandma
6:00
Speaker 3: who used to do this in her village in India.
6:03
Speaker 2: But this is true story. This is a truth just
6:06
Speaker 2: so story. It's actually happening.
6:08
Speaker 3: This is actually happens. This is a true story. My
6:11
Speaker 3: grandmother lived in a small village and she would choose
6:17
Speaker 3: people from the village who she would see at market,
6:21
Speaker 3: who she would see at the temple, who she knew
6:24
Speaker 3: were trustworthy, to come together into this group. And she
6:28
Speaker 3: would determine a set sum of money. So to make
6:32
Speaker 3: the maths easy, let's say one hundred rupees, okay, and
6:37
Speaker 3: let's say there were ten women that were coming together.
6:41
Speaker 3: So these ten women would agree to put a hundred
6:44
Speaker 3: groupees into a pot every month. So my grandmother would
6:50
Speaker 3: go around and she would collect the one hundred rupees
6:53
Speaker 3: from all ten women, and that pot would suddenly have
6:57
Speaker 3: a thousand rupees in it and one woman would be
7:01
Speaker 3: given that one thousand rupees to have for the month,
7:06
Speaker 3: so they could spend it however they wished. They could
7:09
Speaker 3: buy a new sorry, they could you know, sacrifice something
7:15
Speaker 3: at the temple, they could put it towards their child's
7:18
Speaker 3: tuition for school, whatever they wanted to do with it.
7:22
Speaker 3: The next month, they would all come together, or rather
7:25
Speaker 3: my grandmother would go and seek them out and gather
7:28
Speaker 3: that one hundred rupees from each person until all ten
7:32
Speaker 3: had put one hundred rupees in, which meant there was
7:34
Speaker 3: a thousand rupees for the next person to use. And
7:37
Speaker 3: so every month that would rotate until each person over
7:43
Speaker 3: that ten month cycle had an opportunity to use that
7:46
Speaker 3: one thousand rupees. And what is so fascinating about this
7:51
Speaker 3: to me is it is something that I thought was Asian,
7:56
Speaker 3: because I'm half Indian half Taiwanese. We do this in
8:01
Speaker 3: Taiwan and in China as well. We call it hui
8:04
Speaker 3: which means association or hui kind of coming together in
8:10
Speaker 3: an association. But in India we call them chip funds
8:13
Speaker 3: or kiddies. So I thought it must be an Asian thing.
8:18
Speaker 3: And then I remember when I first moved here to
8:22
Speaker 3: working at the US Embassy in London. I met a
8:26
Speaker 3: Jamaican man. He said, Oh, we do something just like this,
8:30
Speaker 3: and we call it Pardna or Pardna hand. And then
8:34
Speaker 3: I spoke to my friend who's British Pakistani and she said,
8:39
Speaker 3: we do this too, we call it committee. And I thought, okay,
8:42
Speaker 3: well that's still asia interesting. Then I met someone who
8:45
Speaker 3: was Somali and she said, we do this too, we
8:48
Speaker 3: call it hegbud. And then I met someone who's Mexican
8:53
Speaker 3: and said, we do this too, we call it tanda.
8:57
Speaker 3: And so the more I sought it out, the more
9:01
Speaker 3: I realized that in the global majority, most of us
9:04
Speaker 3: are doing this, and we have been doing it for
9:07
Speaker 3: generations for a thousand years.
9:10
Speaker 2: Right, there's literally I saw a study that found evidence
9:14
Speaker 2: of this in like Song China, which is truly like
9:18
Speaker 2: a thousand years of mixture, one thousand, Right, So there
9:21
Speaker 2: is this interesting question of why, right, Like, this is
9:25
Speaker 2: a kind of technology. Right, it's like a bottom up
9:29
Speaker 2: financial technology that I think pretty clearly has been sort
9:32
Speaker 2: of independently invented in different places over time. Right, So, like,
9:37
Speaker 2: what is it about it that makes people keep figuring
9:41
Speaker 2: this out and keep doing it?
9:43
Speaker 3: So that is something that has plagued my mind for
9:48
Speaker 3: years now, not least because I'm building my business around it.
9:53
Speaker 3: But yeah, one of the things that I think about
9:58
Speaker 3: often is our different cultural attitudes towards money, but also
10:06
Speaker 3: just society in general. And there's a I believe he's Dutch,
10:12
Speaker 3: a man named Hirtz Hofstetter, and he had this framework,
10:18
Speaker 3: the hofstad Is framework of culture, and where every culture
10:22
Speaker 3: has a different flavor to it. Obviously, but some cultures
10:28
Speaker 3: are very individualistic and some cultures are very collective. And
10:35
Speaker 3: in the global South, in Asian countries, in African cultures,
10:41
Speaker 3: in Latin cultures, we tend to have more collective cultures,
10:47
Speaker 3: whereas in the West we are often more individualistic.
10:53
Speaker 2: So there's this broad context of like, okay, a more
10:56
Speaker 2: communal vibe leads you into this kind of thing. I mean,
10:58
Speaker 2: I could also imagine like it's a kind of savings, right, yeah,
11:02
Speaker 2: kind of savings. It's right there in the name. And
11:04
Speaker 2: you can think of a lot of places in the
11:06
Speaker 2: world where you cannot put your money in the bank,
11:09
Speaker 2: or if you could, your money might disappear, right, Like
11:12
Speaker 2: the idea that the that the bank is not going
11:15
Speaker 2: to go under and that if it does, there's a
11:16
Speaker 2: reliable government insurance. Yeah, which is in fact the case
11:20
Speaker 2: now in the US and much of the developed world,
11:22
Speaker 2: is obviously not the case for most of world history.
11:24
Speaker 2: So like that seems like quite a whatever, a less
11:28
Speaker 2: warm and fuzzy but also plausible virtue of the ROSCA.
11:34
Speaker 3: I absolutely think this. But if we really drill down,
11:38
Speaker 3: I mean, in the States, we have credit unions, right,
11:42
Speaker 3: or community banks and that sort of thing, and that's
11:45
Speaker 3: just a more macro version of a ROSCA, Right. It's
11:49
Speaker 3: a group of people coming together with some sort of affinity.
11:53
Speaker 3: We all live in the same area, or in Edinburgh,
11:57
Speaker 3: there's a lovely facade of what is now a clothing store,
12:04
Speaker 3: but it says the Laundry Workers Bank, and it was
12:07
Speaker 3: people who worked at the laundry together that came together
12:10
Speaker 3: to form effectively a community bank. And so it's something
12:14
Speaker 3: we've been doing but have lost sight of over time.
12:19
Speaker 3: But I definitely think that you're right that there's something
12:21
Speaker 3: in trust or the lack of trust, especially if you
12:25
Speaker 3: live in a country where maybe you do not trust
12:28
Speaker 3: financial institutions, you do not trust your government for whatever reason.
12:33
Speaker 3: I think that's probably why it's so prevalent in those areas,
12:36
Speaker 3: more so than it is in the West.
12:40
Speaker 2: Okay, so you discover the rosca and you're gonna and
12:46
Speaker 2: then what you're gonna build a rosca app I mean,
12:48
Speaker 2: that's basically the move at that point.
12:51
Speaker 3: What really intrigued me about the rosca and as someone
12:55
Speaker 3: who had seen it right with my own parents ing
12:57
Speaker 3: and my grandparents doing it, was one it exists in
13:03
Speaker 3: almost every culture, uh, non Western culture, I should specify.
13:09
Speaker 3: And what was interesting to me about that is, just
13:12
Speaker 3: like remittances and money transfer, it's something that every culture does, right.
13:16
Speaker 3: It doesn't matter if you're sending money from like my
13:20
Speaker 3: dad did, California to India, or to Pakistan or to
13:25
Speaker 3: wherever in the world to Mexico. People are sending money
13:30
Speaker 3: and so similarly, it was a behavior that was replicable
13:33
Speaker 3: across cultures. What was very interesting to me is everyone
13:38
Speaker 3: has their own name for it.
13:39
Speaker 2: Yeah, give me a list. You did a few, Like,
13:42
Speaker 2: how many can you give me? If you just go
13:44
Speaker 2: in one breath? Oh gosh, okay, on your marks, get
13:48
Speaker 2: set ready, go, We've.
13:50
Speaker 3: Got Tannine Mexico Consocio in Brazil. Partner or partner Han
13:56
Speaker 3: in Jamaica, money Box in Saint Lucia, hegbad Ayuto in Somalia,
14:04
Speaker 3: Ajo in Nigeria or is Susu depending on your tribek
14:08
Speaker 3: Limba in Congo, Tontine in any Francophone African country. We've
14:15
Speaker 3: got Committee in Bangladesh and Pakistan, panlu Wagan in Philippines,
14:21
Speaker 3: Aisan in Malaysia, Hui or Hue in China, and Taiwan
14:28
Speaker 3: Jungam in South Korea.
14:31
Speaker 2: The list goes on very good. And I can say
14:34
Speaker 2: I'm talking about video you were not reading now, you
14:37
Speaker 2: were looking like up at the ceiling. That was truly
14:39
Speaker 2: off the top.
14:40
Speaker 3: Yes, off the top of my head. It's my party
14:42
Speaker 3: trick now, So I mean people will be like, I'm
14:45
Speaker 3: from here, what is it called? And I have to
14:48
Speaker 3: try and figure it out. And then more importantly, and
14:51
Speaker 3: going back to the original problem that we were discussing,
14:55
Speaker 3: is people are moving huge sums of money. Depending on
15:02
Speaker 3: who you speak to, there's one startup that's done the
15:05
Speaker 3: math and they think globally there's three hundred billion dollars
15:08
Speaker 3: moving through Rosco's globally. But it's something that people take
15:15
Speaker 3: with them, especially immigrant communities when they move to a
15:18
Speaker 3: new place. Because they are new, they know their community.
15:21
Speaker 3: They seek out their community first, they might join the
15:25
Speaker 3: community circle or club as we might call it. And
15:29
Speaker 3: what is fascinating and so valuable about this is if
15:34
Speaker 3: someone is putting in one hundred dollars or one hundred
15:37
Speaker 3: pounds or one hundred euros every month and they're paying
15:39
Speaker 3: in on time, that's actually really great financial behavior. Right.
15:45
Speaker 3: It tells me you're good for the money.
15:47
Speaker 2: Yes, that that's that's a good credit right. I mean fundamentally,
15:51
Speaker 2: you you select people. When your grandmother was doing this
15:55
Speaker 2: choosing people for her club, she had a credit score
15:57
Speaker 2: in her mind, right, Like exactly, you are. You are
15:59
Speaker 2: just reducing trust to the neighborhood. You're not going to
16:02
Speaker 2: invite somebody who's gonna get a thousand bucks right now
16:07
Speaker 2: and pay you back a thousand bucks over the next year.
16:10
Speaker 2: You're not going to invite them if they are sketchy.
16:12
Speaker 3: No. Absolutely, And and some of my favorite interactions I
16:16
Speaker 3: speak French, and so where I live in London is
16:20
Speaker 3: called Lewisham and there's a lot of West African folks here,
16:24
Speaker 3: a lot of Francophone West Africans, and there's a hair
16:28
Speaker 3: salon where I go to get my eyebrows done. There's
16:30
Speaker 3: a lovely Sri Lankan woman that does that. But there
16:33
Speaker 3: are these Ivorian women doing braiding hair and I started
16:39
Speaker 3: speaking to them about it, and they're speaking in French,
16:42
Speaker 3: and I don't think they realize that I speak French.
16:45
Speaker 3: And they were basically just talking shit about the various people.
16:50
Speaker 3: And they're like, we don't like so and so she
16:53
Speaker 3: never pays in on time, she's not allowed into are
16:55
Speaker 3: tol tine as they call it in Francophone Africa, and
17:00
Speaker 3: so people are underwriting their community.
17:03
Speaker 2: That credit score, gossip at the salon.
17:08
Speaker 3: It's the original, and it's like, we know that she
17:10
Speaker 3: doesn't pay on time, she doesn't go to church, she's
17:12
Speaker 3: not going to be there whatever. But these are things
17:15
Speaker 3: that people have been using to underwrite each other for
17:19
Speaker 3: thousand years plus.
17:20
Speaker 2: Right, So okay, well you've got the thousand years. It's
17:23
Speaker 2: time for you to start your company in this narrative. Now,
17:26
Speaker 2: how do you start a company, you know, around this idea,
17:28
Speaker 2: around this practice.
17:31
Speaker 3: Not easily, I'll tell you that much. I think the
17:35
Speaker 3: interesting thing is I have worked in the fintech industry
17:40
Speaker 3: financial technology for so long now, and it never occurred
17:44
Speaker 3: to me that I would be a founder myself or
17:48
Speaker 3: the entrepreneur in charge. I'm very good at building things,
17:53
Speaker 3: and I've got a lot of pleasure out of building
17:57
Speaker 3: interesting products. And so I built a no code app
18:02
Speaker 3: and I said, let's just see if this thing works.
18:06
Speaker 3: And so I invited fifty women. I do a lot
18:11
Speaker 3: of work with various migrant groups and specifically women, and
18:17
Speaker 3: invited them to try this web app. And what we
18:21
Speaker 3: found was there was one hundred percent payment right. Everyone
18:25
Speaker 3: paid on time, and people said to us, this is great.
18:30
Speaker 3: I didn't have to go get cash out. I didn't
18:32
Speaker 3: have to send my child with the cash down to
18:35
Speaker 3: the auntie's house for collection. It was great, like it
18:38
Speaker 3: was collected and it was sent out to me when
18:40
Speaker 3: it was time to receive the money. And so now
18:43
Speaker 3: what do I do, because I have to go and
18:45
Speaker 3: get regulated. I can't just be, you know, moving large
18:50
Speaker 3: sums of money around and not be regulated. And so
18:54
Speaker 3: I started the process of explaining to the Financial Conduct
18:58
Speaker 3: Authority what EROSCA is and why it exists. And that
19:03
Speaker 3: was actually very very challenging because there aren't many people
19:07
Speaker 3: that looked like me that work in the Innovation Department
19:11
Speaker 3: of the FCA, right, And if you're you know, a
19:15
Speaker 3: native born, white British person, perhaps you've never come across
19:19
Speaker 3: this before and you don't understand why anyone would engage
19:22
Speaker 3: in this, and you start to ask questions like, well,
19:25
Speaker 3: it feels a little bit like peer to peer lending,
19:28
Speaker 3: where it feels a little bit like crowdfunding.
19:31
Speaker 2: So it does feel a little bit like peer to
19:34
Speaker 2: peer lending. That is not an That is not an
19:36
Speaker 2: unreasonable thought, it's not at all.
19:38
Speaker 3: And even even crowdfunding, you could argue that, yeah, actually,
19:42
Speaker 3: in a way, it is crowdfunding and it rotates fine.
19:46
Speaker 3: So we really had to make the case that this
19:50
Speaker 3: is neither peer to peer lending nor crowdfunding, but its
19:54
Speaker 3: own special thing. Then I had to go and face
20:00
Speaker 3: the venture capital industry, and that was probably the most
20:03
Speaker 3: daunting thing I've ever done to this day. Still. I'm
20:07
Speaker 3: from the Silicon Valley, and you know, I grew down
20:10
Speaker 3: the street from Apple and you know there, I mean,
20:16
Speaker 3: venture capital firms are a dime a dozen in the
20:18
Speaker 3: Silicon Valley. But it's very different just driving past and
20:24
Speaker 3: then going into actually pitch to these folks to say
20:28
Speaker 3: here's this problem that I want to solve, here's why
20:30
Speaker 3: I want to do it, and here's why you should
20:33
Speaker 3: give me a million pounds to do it. Right. But
20:37
Speaker 3: I did that and it was very very daunting, very
20:41
Speaker 3: very difficult. But it was one of those things where
20:44
Speaker 3: I wouldn't be able to bootstrap, as we say, kind
20:47
Speaker 3: of use my own money to fund this business, because
20:50
Speaker 3: of course we're building a tech product and it's regulated
20:54
Speaker 3: and so it just requires a little bit more of
20:57
Speaker 3: that upfront investment. And then from there we were off
21:01
Speaker 3: to the races.
21:06
Speaker 1: We'll be back in just a minute.
21:18
Speaker 2: So how does it work? What's the thing you have now?
21:21
Speaker 2: And how does it work?
21:22
Speaker 3: Yeah, So the Bloom app is pretty straightforward. It's an
21:27
Speaker 3: app where you download it, you register, you go through
21:30
Speaker 3: Know your Customer or KYC, so we ask you for
21:34
Speaker 3: a selfie and a picture of your ID, and from
21:37
Speaker 3: there we do all these checks in the background, make
21:41
Speaker 3: sure you are who you say you are, and then
21:44
Speaker 3: you go to the homepage and you're able to either
21:47
Speaker 3: create a circle, so we call them Bloom circles to
21:51
Speaker 3: homogenize the name across cultures. You can either create your
21:55
Speaker 3: own circle and choose how much you want to put
21:58
Speaker 3: in how often, so you can do it weekly, bi
22:01
Speaker 3: weekly or monthly, although monthly is the most popular cadence.
22:06
Speaker 3: You choose how much, how many people, and then your
22:09
Speaker 3: start date and from there you can share your circle
22:13
Speaker 3: and say here's the code, join my circle and in
22:16
Speaker 3: a private circle. That means you are in full control.
22:20
Speaker 3: And this is the most faithful reproduction I guess of
22:25
Speaker 3: what we have done for a thousand years. So it
22:28
Speaker 3: can be my friends and family, it can be the
22:30
Speaker 3: people at the mosque, whoever, right.
22:32
Speaker 2: So in this case, this is just replacing like having
22:36
Speaker 2: to take cash to whoever every month, correct with an
22:40
Speaker 2: automated system. And so how does the money actually flow?
22:43
Speaker 2: Like does everybody have to have a bank account? Are
22:46
Speaker 2: you a bank?
22:47
Speaker 3: So everyone has to have their own UK based bank
22:52
Speaker 3: account because we're based in the UK. And then they
22:55
Speaker 3: have to have a UK issue debit card, so we
22:58
Speaker 3: don't let people use credit for this particular financial activity.
23:05
Speaker 3: But what they do is they connect their debit card
23:07
Speaker 3: and the money is automatic collected on the set date
23:11
Speaker 3: each month or whatever the cadence is, and then we
23:14
Speaker 3: take your bank details and when it's your turn to
23:17
Speaker 3: receive your payout. We send that straight into your bank account.
23:21
Speaker 2: So a lot of you're basically the rails.
23:23
Speaker 3: You're the pipe exactly. We are the pipes. We orchestrate
23:26
Speaker 3: the payments for you and take that stress out of
23:30
Speaker 3: you know, following up and trying to figure out where
23:33
Speaker 3: is the money and someone says, oh, I need to
23:35
Speaker 3: get cash out or all those drama.
23:37
Speaker 2: That comes with that, and what do you charge?
23:40
Speaker 3: So we try a transaction fee of four percent and
23:43
Speaker 3: that allows us to safely process and manage your account
23:47
Speaker 3: with a little bit of margin for us to be
23:49
Speaker 3: able to put back into our business of course. But
23:52
Speaker 3: what is really interesting is when you're in the Bloom circles,
23:56
Speaker 3: you have the option to do a private circle, but
24:00
Speaker 3: most of our volume is actually through what we call
24:03
Speaker 3: community or public circles. And this is where people will
24:08
Speaker 3: join fleet strangers in a circle. And that has been
24:13
Speaker 3: fascinating to me because as someone that.
24:16
Speaker 2: Is wild, that's most of your business.
24:18
Speaker 3: I would say ninety five percent of our circles are
24:22
Speaker 3: pure strangers coming together in circles.
24:26
Speaker 2: Is it like a well, what happens if somebody gets
24:30
Speaker 2: all the money the first month and then bails and that.
24:33
Speaker 3: Is exactly it. So we have had bad actors. But
24:37
Speaker 3: you know what is fascinating is we've had people take
24:40
Speaker 3: the money and then run, and in this instance that
24:45
Speaker 3: will mean they'll stop topping up their account, or they'll
24:48
Speaker 3: cancel their card or whatever. But what is very fascinating
24:52
Speaker 3: is the people that have cut and run end up
24:56
Speaker 3: coming back and we've been made whole. They have paid
24:59
Speaker 3: us back for that money because they realize if they
25:03
Speaker 3: want to join a subsequent circle, there's no way that
25:07
Speaker 3: we're going to let them onto our platform because they
25:09
Speaker 3: screwed everyone else over.
25:11
Speaker 2: I mean I wouldn't let them back even if they asked,
25:14
Speaker 2: if they cut it round and then said can I
25:16
Speaker 2: come back? I don't think you should say yes.
25:19
Speaker 3: So we've not let anyone back in what we have
25:23
Speaker 3: a rehabilitation program where people can start to like pay
25:27
Speaker 3: back smaller sums because there.
25:29
Speaker 2: Is or you can let them join, but they're the
25:31
Speaker 2: ones who get paid last in the cycle. I guess
25:33
Speaker 2: that's insurance. Wait, let me ask just to be clear, like,
25:37
Speaker 2: is there any kind of insurance Like if somebody takes
25:39
Speaker 2: all the money the first month and then splits, are
25:42
Speaker 2: the other people in the circle just screwed or is
25:44
Speaker 2: there some kind of insurance present.
25:46
Speaker 3: We don't have insurance. And we make that very clear with.
25:49
Speaker 2: Is it a contract, like is the person committing fraud
25:52
Speaker 2: or anything if they take the money and bail, are
25:54
Speaker 2: they just a bad person?
25:55
Speaker 3: So well, both there is a contract and so they
25:59
Speaker 3: actually have to sign it. And that has really come
26:03
Speaker 3: in handy and it says a lot about signatures in
26:08
Speaker 3: today's digital world to me.
26:11
Speaker 2: Because people think it means something even though it actually doesn't.
26:14
Speaker 2: Is that the secret of the contract, It truly is.
26:16
Speaker 3: Because first we tried doing biometrics, so people would do
26:20
Speaker 3: a selfie or you know, use face ID, or they
26:23
Speaker 3: would do their touch, you know, thumbprint, and they would say, oh, well,
26:27
Speaker 3: I didn't sign anything. That's not me signing, even though
26:30
Speaker 3: they've used their biometric And so we actually have a
26:33
Speaker 3: step now where you have to sign with your finger.
26:37
Speaker 3: You're a signature like on your phone phone And it
26:41
Speaker 3: has really changed people's perception of like, oh, I am
26:44
Speaker 3: actually entering into an agreement now and I'm going to
26:49
Speaker 3: pay this money in And so we do not make
26:52
Speaker 3: people whole, and we make that very clearer in our
26:54
Speaker 3: terms and conditions when people are joining circles, and yet
26:59
Speaker 3: we have a ninety eight percent payment rate, and so
27:05
Speaker 3: very rarely are people cutting and running, and even if
27:09
Speaker 3: they do, they tend to come back and kind of
27:12
Speaker 3: feel guilty about it. And I think that says something
27:15
Speaker 3: about this social cohesion, right.
27:18
Speaker 2: Yeah, And just to be clear, this is people who
27:20
Speaker 2: are just randomly assigned to a circle.
27:23
Speaker 3: Correct.
27:23
Speaker 2: They don't know the other people, they're not from the
27:26
Speaker 2: same community, they don't live in the same neighborhood, whatever, exactly.
27:30
Speaker 2: That's really interesting. I guess it's hardening in a way.
27:33
Speaker 2: I think I would have predicted worse behavior. Yeah, I
27:36
Speaker 2: think that's good news, right in.
27:37
Speaker 3: Today's society where you're you're very skeptical of humanity and
27:42
Speaker 3: and you're looking for the good but expecting the worst, perhaps.
27:47
Speaker 2: Especially in a you know, anonymized, distant, digitized way exactly.
27:53
Speaker 3: And I think though, one of the things that kind
27:55
Speaker 3: of helps us is we both we have a care
27:58
Speaker 3: and a stick. So what we've been doing is actually
28:00
Speaker 3: taking this data that we were collecting. Let's see that you,
28:03
Speaker 3: Jacob have paid in every month on time. We are
28:06
Speaker 3: building our own underwriting algorithm and saying Jacob's good for
28:10
Speaker 3: the money. This is fantastic so that we can eventually
28:13
Speaker 3: go into lending and say, uh huh, hey, Jacob, you've
28:17
Speaker 3: got a perfect bloom credit score. We're going to lend
28:20
Speaker 3: to you now.
28:21
Speaker 2: In the way that so far started out doing just
28:23
Speaker 2: this very narrow like, oh, we'll lend money from alumni
28:26
Speaker 2: to college students. And now they're just like a giant
28:28
Speaker 2: financial institution. You're that, but for immigrants exactly that.
28:32
Speaker 3: And so what we keep seeing is that people want
28:37
Speaker 3: to have a good record.
28:38
Speaker 2: Uh huh, you're their credit score. You're the immigrant credits.
28:42
Speaker 3: We're the immigrant credit score. And we have the largest
28:46
Speaker 3: data set in the UK on immigrant communities and their
28:49
Speaker 3: financial behavior at present.
28:51
Speaker 2: How big is it? How big is it?
28:53
Speaker 3: So we're still tiny, We're thirteen thousand customers. We're very
28:58
Speaker 3: very early stage. But the very interesting thing is no
29:01
Speaker 3: one else has thought to do this before.
29:04
Speaker 2: And by the way, how many people do you reject
29:06
Speaker 2: up front? How much of your you know, high payment
29:09
Speaker 2: rate comes from figuring out beforehand who do not let in?
29:13
Speaker 3: Usually they wouldn't even have made it to be able
29:18
Speaker 3: to join a circle. Like if there's someone that has
29:20
Speaker 3: fraudulent behavior, all of those backend checks that we do
29:23
Speaker 3: to make sure you are who you say you are
29:25
Speaker 3: will usually have already declined to even offer you an
29:28
Speaker 3: account in the first place.
29:30
Speaker 2: How often does that happen?
29:33
Speaker 3: Maybe one percent of the time. I mean that is
29:35
Speaker 3: the beauty of kind of I think we are that
29:39
Speaker 3: bridge from the informal financial system into the formal financial
29:44
Speaker 3: system because we can kind of take all of this
29:47
Speaker 3: other data access around us, and you know, you might
29:51
Speaker 3: have a record good or bad elsewhere, but we can
29:54
Speaker 3: connect those dots and then ultimately our goal is to
29:58
Speaker 3: work with you know, the transunions, the experience the echo
30:00
Speaker 3: fax is to actually help people build their credit scores
30:04
Speaker 3: using bloom circles. Though it's not actually a credit product,
30:09
Speaker 3: is a behavior that people are already doing and we're
30:14
Speaker 3: just formalizing it and digitizing it, and so it's something
30:17
Speaker 3: that longer term will actually show us more valuable insights
30:22
Speaker 3: into the financial behavior of our customers.
30:26
Speaker 2: What was something you tried that didn't work.
30:29
Speaker 3: I'll be honest, it's the private circles. When we first launched,
30:33
Speaker 3: we launched with private circles, and you know, in the
30:37
Speaker 3: startup land, they say build it and they will come
30:41
Speaker 3: so I was like, great, here it is the apps
30:44
Speaker 3: out were regulated, let's go, and no one was transacting.
30:51
Speaker 3: It was I felt like I was running into a
30:54
Speaker 3: brick wall, like, come on, why isn't anyone moving money?
30:58
Speaker 3: Build it and they will come. And they were creating accounts,
31:00
Speaker 3: and they were registering and connecting their debit cards, but
31:03
Speaker 3: they weren't joining or creating circles. And I started to
31:08
Speaker 3: speak to people and just call customers up or email
31:12
Speaker 3: them and say, you know, we see you've registered. What's
31:15
Speaker 3: keeping you from going the next step and actually joining
31:18
Speaker 3: a circle. And we heard a lot of excuses. We
31:22
Speaker 3: heard I'm in the circle right now, and it you know,
31:26
Speaker 3: it's a cash one and it will end in a
31:28
Speaker 3: few months and I'll join a bloom one then, or
31:32
Speaker 3: I'm going to join a bloom one at the start
31:34
Speaker 3: of the year, because I always do one at the
31:35
Speaker 3: beginning of the year, So some of it was timing.
31:38
Speaker 3: But the most common response that we got was I
31:43
Speaker 3: don't have enough friends.
31:46
Speaker 2: Huh.
31:46
Speaker 3: And that was so so interesting to me because I
31:50
Speaker 3: pushed them on that what does that mean? What do
31:51
Speaker 3: you mean you don't have enough friends? And what they
31:54
Speaker 3: meant is I don't have enough people that can match
31:57
Speaker 3: the financial obligation of what I want to put in
32:00
Speaker 3: to my circle. So they might say, you know, I
32:03
Speaker 3: want to put one hundred pounds a month in, but
32:05
Speaker 3: my sister can only afford to do fifty. That's not
32:10
Speaker 3: enough for me. I want to be able to do
32:12
Speaker 3: it with six people and have six hundred pounds at
32:15
Speaker 3: the end of it to make it really worth my while, right,
32:17
Speaker 3: instead of maybe three hundred pounds. And I kept hearing
32:21
Speaker 3: this over and over and over. I heard a lot
32:24
Speaker 3: of people say, I don't want to be in a
32:27
Speaker 3: circle with my friends and family because I don't want
32:30
Speaker 3: them to know.
32:32
Speaker 2: Yeah, oh, yeah, right, I don't want them to know.
32:34
Speaker 2: That's interesting, and it was fascinating. I don't want them
32:36
Speaker 2: to know that I'm going to get one thousand pounds
32:38
Speaker 2: one month, because that'll exactly And.
32:41
Speaker 3: One of our team members, Asha, she comes from an
32:46
Speaker 3: usher Yemeny family, and she was joking like, I don't
32:50
Speaker 3: want them knowing my business because you know, if they
32:54
Speaker 3: know how much disposable income I have, they're going to
32:56
Speaker 3: pressure me to send more money home. And that was
32:59
Speaker 3: fascinating to me.
33:00
Speaker 2: It's kind of that's really interesting. Some of it was
33:03
Speaker 2: just my anonymized finess finance. Right, this is like, no, no,
33:07
Speaker 2: I don't want community, I just want findance.
33:10
Speaker 3: I just want finance. I want culturally resonant. And I
33:14
Speaker 3: you know, it's something we understand and the behavior is done.
33:17
Speaker 2: But I actually but it is kind of an anti
33:19
Speaker 2: communal vibe. Right, It's like, I want my business to
33:23
Speaker 2: be my business.
33:23
Speaker 3: Paradoxically exactly that, And nowadays it's fascinating people that join
33:29
Speaker 3: public circles. Oftentimes we have one person that will then
33:34
Speaker 3: start and they'll become a node and create their private
33:36
Speaker 3: circle and bring in their group of family. And that
33:40
Speaker 3: tells us that that person probably was seeing if they
33:43
Speaker 3: could trust us and if the money was going to
33:45
Speaker 3: end up where it was supposed to before bringing in
33:48
Speaker 3: their social group. So it was one of those things
33:51
Speaker 3: where we launched with it and yeah, it's it didn't
33:55
Speaker 3: just go gangbusters, but it's it taught us a lot
33:59
Speaker 3: about the underlying behavior of our community. One of the
34:03
Speaker 3: things that we found over and over again when we
34:06
Speaker 3: spoke to customers is Okay, I have this money now
34:09
Speaker 3: and I don't know what to do with it, so
34:12
Speaker 3: I end up sending more home and it ends up
34:15
Speaker 3: being like a bonus for everyone back home, or I
34:18
Speaker 3: end up buying something that ends up being useless and
34:22
Speaker 3: not something that I actually need, and it's a waste
34:25
Speaker 3: of money. So I want to know where I should
34:28
Speaker 3: put this money. And so now with technology, what we
34:31
Speaker 3: can do is say, hey, Jacob, you received five hundred pounds,
34:35
Speaker 3: why don't you put half of that into a money
34:37
Speaker 3: market fund and actually grow your money? Why don't you
34:40
Speaker 3: put it into a pension pot and again have your
34:44
Speaker 3: money work for you.
34:45
Speaker 2: And the people are right there in your app when
34:48
Speaker 2: they get the money right like that.
34:50
Speaker 3: And so now we can just direct that flow of
34:53
Speaker 3: funds and say, yeah, put it in this money market fund. Great. Yes,
34:58
Speaker 3: of course they're socioeconomic and geopolitical differences between us. But
35:03
Speaker 3: can we actually get people to have access to financial
35:07
Speaker 3: products and serve them to them at the right time
35:10
Speaker 3: in a culturally relevant way and help them build financial
35:14
Speaker 3: resilience and wealth for themselves wherever their new home is.
35:18
Speaker 3: That's ultimately what we're driving towards.
35:20
Speaker 2: Not to be crass after that high minded idea, which
35:24
Speaker 2: I am a fan of, but like in that universe,
35:27
Speaker 2: do you get essentially a commission from whatever money market
35:31
Speaker 2: fund you're sending the people to, like, what's the business
35:33
Speaker 2: model for that time?
35:34
Speaker 3: Yeah, exactly, So would be very much like your Betterments
35:37
Speaker 3: of the world, where you charge a management fee of
35:41
Speaker 3: some sort and then we would just take that percentage
35:45
Speaker 3: off the assets of your management.
35:48
Speaker 2: So in that universe, they're like coming to the blue
35:50
Speaker 2: map to look at their money market fund exactly, and
35:53
Speaker 2: you're not the money market fund, but you're where they
35:56
Speaker 2: sort of.
35:56
Speaker 3: Deal with exactly, and we ultimately, over time, as we
36:00
Speaker 3: grow as a business, become that financial headquarters. But through
36:06
Speaker 3: the lens of people who live a diaspora lifestyle where
36:11
Speaker 3: it's we get it. You're gonna have to send money home.
36:14
Speaker 3: That's great, but why don't you also put some aside
36:16
Speaker 3: for you or down the line. You know, my dad
36:21
Speaker 3: bought a plot of land in India and built a
36:23
Speaker 3: house for my late grandparents and his siblings. It's very
36:28
Speaker 3: common for people from immigrant backgrounds to buy a plot
36:32
Speaker 3: of land, build a house and that sort of thing. Well,
36:35
Speaker 3: imagine a world where at Bloom you can also like
36:39
Speaker 3: manage the flow of your funds so that the builders
36:41
Speaker 3: get paid and everything, and you know, you have the
36:44
Speaker 3: money to a mortgage to buy that plot of land, right,
36:48
Speaker 3: And there's so many different directions that these things can
36:53
Speaker 3: go where it's very specific to straddling countries, if not continents, right,
36:59
Speaker 3: But being of diaspora means that you are often one
37:03
Speaker 3: foot on one continent and one foot on the other.
37:06
Speaker 3: And so where the place that they can come? And
37:08
Speaker 3: that's that's the grand vision.
37:13
Speaker 2: Are you going to come to the US?
37:18
Speaker 3: I mean I am coming to the US. I'm an
37:21
Speaker 3: American citizen. Bloom It's an interesting one. Bloom money is
37:27
Speaker 3: serving immigrants, and of course the United States is the
37:30
Speaker 3: largest market for that to be a success. I think
37:36
Speaker 3: what I find exciting about Europe is that we are
37:40
Speaker 3: largely becoming a region of immigration across the European continent.
37:47
Speaker 3: And it's something that people don't realize, or they do
37:50
Speaker 3: through a political lens, but not through a financial services lens,
37:53
Speaker 3: and so there's a huge opportunity. Whereas in the States
37:57
Speaker 3: it's kind of written on the tin that we're a
37:59
Speaker 3: country of immigrants, like that's literally how we started. And
38:04
Speaker 3: so it's a bit more of an obvious problem, which
38:07
Speaker 3: means there's a lot more players in this. No one's
38:10
Speaker 3: doing exactly what we're doing, but there's a lot more folks,
38:13
Speaker 3: you know, specifically serving Latinos, right, So does.
38:17
Speaker 2: That mean you're going to Europe next?
38:20
Speaker 3: That is the plan, and I think, you know, be
38:24
Speaker 3: a country like France or maybe Germany where you have
38:28
Speaker 3: really large captive audiences, whether it's Turkish and Syrian in
38:33
Speaker 3: Germany or Francophone African in France. So watch this space.
38:44
Speaker 2: We'll be back in a minute with the lightning round.
38:59
Speaker 2: Let's finish with the lightning round. Okay, Oh gosh. If
39:05
Speaker 2: you could join a money club with any three people
39:09
Speaker 2: living or dead, who would they be?
39:13
Speaker 3: I would join with Hmmm, I would join with Emmeline Pankhurst.
39:26
Speaker 3: We love a suffragette queen. I would join with Benezir
39:33
Speaker 3: Bhutto in the ra Gandhi. And there's me, so maybe
39:40
Speaker 3: I'll add one more. Uh.
39:42
Speaker 2: These are political political leaders.
39:45
Speaker 3: Who happen to be and Mohammad Yunis, who is, like
39:48
Speaker 3: I guess, the interim leader of Bangladesh right now, but
39:52
Speaker 3: he was the founder of the Grimen Bank in Bangladesh
39:57
Speaker 3: and has very much experimented with roscas and how they
40:03
Speaker 3: can be used in developing countries. So yeah, those would
40:07
Speaker 3: be my few people.
40:09
Speaker 2: I feel like those people would all be good for it.
40:11
Speaker 3: Yeah, I feel like they'd be good for the money
40:12
Speaker 3: as well. Although Emily Pankhurst, I don't know, she got up.
40:16
Speaker 3: She was, you know, pamphleting. Women weren't allowed to have
40:19
Speaker 3: pockets because we would give pamphlets out, you know, about
40:23
Speaker 3: stuff for dead.
40:26
Speaker 2: It's amazing how many women's pants still do not have pockets.
40:29
Speaker 2: It's shocking to me.
40:30
Speaker 3: It is actually shocking, and I it's actually one of
40:34
Speaker 3: the things that I look for from a fashion perspective
40:37
Speaker 3: when I buy dresses even I'm like, yes, pockets.
40:40
Speaker 2: Pockets, it's a useful technology. Pocket everybody, what's one thing
40:48
Speaker 2: written on a post it note in front of you
40:50
Speaker 2: right now?
40:53
Speaker 3: Slow it down, Calm it down, pressure brakes and that's good. Yeah,
41:01
Speaker 3: that's just a reminder for me to not just speak
41:05
Speaker 3: too quickly when I'm actually speaking to people. But also
41:08
Speaker 3: just the course of business, like, applying pressure through speed
41:14
Speaker 3: doesn't always help things, and sometimes it breaks things and
41:18
Speaker 3: keeps a deal from happening because people feel pressured. So
41:21
Speaker 3: slow it down, calm it down.
41:23
Speaker 2: It's funny. I was thinking it was going to be
41:25
Speaker 2: like make dentist appointment.
41:28
Speaker 3: I mean, I've got those too, but they're far less
41:31
Speaker 3: they're far less deep. Jacob, I need you to, I
41:34
Speaker 3: need you to.
41:37
Speaker 2: Yes. How did your parents talk about money when you
41:41
Speaker 2: were a kid?
41:44
Speaker 3: Definitely from a scarcity mindset. We were a family that
41:50
Speaker 3: my father would like keep plastic bags and we very
41:54
Speaker 3: much would like you know, back in the nineties when
41:57
Speaker 3: they use proper plastic for ice cream tubs, like those
42:00
Speaker 3: would become tupperware for us to use until that thing
42:03
Speaker 3: broke down. But I think it was always a scarcity
42:07
Speaker 3: minds that there's never enough, and everything was about scrimping
42:10
Speaker 3: and saving. And my prom dress was thirty dollars from
42:13
Speaker 3: like I think it was rass or Marshals, and you
42:18
Speaker 3: know it was. I was always just taught that there
42:21
Speaker 3: was never enough, and that has unfortunately affected me as
42:25
Speaker 3: an adult because what is enough and what is enough
42:30
Speaker 3: in your emergency fund? What is enough to have in savings?
42:33
Speaker 3: What is enough to have in your investment account? And
42:35
Speaker 3: it becomes very difficult when you're trying to enjoy life
42:40
Speaker 3: as well.
42:41
Speaker 2: Can you just go out to dinner and not worry
42:43
Speaker 2: about it? Can you just order the fucking app.
42:45
Speaker 3: Yeah, just get the fucking latte, you know, like it's
42:48
Speaker 3: okay exactly.
42:50
Speaker 2: Yeah, yeah, I mean I don't want to stereotype, but
42:56
Speaker 2: I do feel like it's a classic immigrant vibe. Like
42:59
Speaker 2: my grandfather was an immigrant, and that's how I always yeah,
43:02
Speaker 2: that's how I came to understand that vibe. Yes, like
43:06
Speaker 2: it's just people for a thousand years didn't have enough,
43:09
Speaker 2: and so being in this world where it's like we're
43:13
Speaker 2: doing great, that's not natural. No family.
43:17
Speaker 3: I think it's something that to this day, my dad refuses.
43:21
Speaker 3: Our garage at home is full of just like crap
43:26
Speaker 3: that doesn't work.
43:28
Speaker 2: Yeah, I have a box of cords that i'd like
43:32
Speaker 2: to show you.
43:32
Speaker 3: And my dad he's got this one vacuum cleaner that
43:36
Speaker 3: he bought from Costco. This thing caught like probably weighs
43:40
Speaker 3: more than I do. And he refuses. I was like,
43:42
Speaker 3: I'm taking this to the dump, like, no one is
43:45
Speaker 3: gonna buy this. He's like, no, I'm selling it for
43:47
Speaker 3: two thousand dollars. I said, Dad, you bought it for
43:50
Speaker 3: two thousand dollars from Costco and this thing doesn't even work.
43:53
Speaker 3: You've got a Dyson, what are you doing? But it
43:56
Speaker 3: really like this hoarding mentality when you felt like you
44:02
Speaker 3: never had enough, it really sticks with you. So I'm
44:05
Speaker 3: trying to break the cycle now and hope hopefully I
44:07
Speaker 3: won't pass it down to any few your children I
44:09
Speaker 3: may have.
44:11
Speaker 2: Yeah, it's complicated though, because like I sort of like it, Yeah,
44:16
Speaker 2: at some level, you know what I mean. Like it's
44:18
Speaker 2: a balance, right obviously, Like people do spend all their money? Yeah,
44:21
Speaker 2: people do, you know, live beyond their means, and so you.
44:24
Speaker 3: Can it's in your head.
44:27
Speaker 2: Is hard, Equanimity is exactly everything.
44:29
Speaker 3: Moderation. There we go.
44:38
Speaker 2: Ninamo Hunty is the founder and CEO of Blue Money.
44:43
Speaker 2: Just a quick note, Whats Your Problem is gonna take
44:45
Speaker 2: a break for the next couple of weeks and then
44:47
Speaker 2: we'll be back with more episodes of the show. Please
44:50
Speaker 2: email us at problem at pushkin dot fm. We are
44:53
Speaker 2: always looking for new guests for the show. Today's show
44:57
Speaker 2: was produced by Trinamanino and Gabriel Hunter Chang, who was
45:01
Speaker 2: edited by Alexander Garretson and engineered by Sarah mcgharrett. I'm
45:05
Speaker 2: Jacob Goldstein and we'll be back next week with another
45:08
Speaker 2: episode of What's Your Problem.
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Speaker 3: U