US rapper Killer Mike unveils Black and Latino-focused challenger bank Greenwood
Greenwood, a challenger banking service part-owned by US rapper Killer Mike, has launched its waiting list for Black and Latinx communities.
The start-up launched the list along with its website on 8 October. Killer Mike – real name Michael Render – is one of two Black co-founders. The other is Atlanta’s former mayor Andrew Young.
Young is a contemporary of Martin Luther King Junior, and his son Bo sits on Greenwood’s board as a member.
But Greenwood is really the brainchild of Bounce TV founder Ryan Glover, who began working on the venture in early 2019.
The fintech raised more than $3 million in seed funding back in June. Its name comes from the former district in Tulsa, Oklahoma, also known as “Black Wall Street”.
The neighbourhood was destroyed during the 1921 Tulsa race massacre.
Momentum following protests
Interest in Greenwood spiked following the police killing of George Floyd in Minneapolis, which has since sparked Black Lives Matter protests globally.
US banks have since pledged millions, and in the case of Bank of America billions, to closing the racial wealth gap.
“I will say we’re in the tens of thousands,” Glover told CNN Business a day after the waitlist launch. “That number is increasing by the day.”
The challenger banking service is set to open in January. The Federal Deposit Insurance Corporation (FDIC) insures Greenwood’s deposits up to $250,000. Its banking partner is not disclosed on its website.
Today, there are only 23 minority-owned banks in the US, according to the National Bankers Association (NBA).
That’s out of 5,116 commercial banks and savings institutions in the US which are insured by the FDIC – so 0.45%.
And that’s reflected in America’s unbanked population. Whilst in 2017, 17% of Black Americans didn’t have a bank account in 2017, just 3% of their white counterparts didn’t have one. That’s according to FDIC figures.
The idea behind Greenwood is to give back to both the Black and Latinx communities, both through charity-based products, as well personal banking services around the current account model.
“In order to build wealth, you need bank capital,” Glover tells CNN. “We will identify qualified entrepreneurs, business owners and creatives to equip them with the capital needed to make their dreams a reality.”
Glover refers to the charity commitments Greenwood has made. Each month, the digital challenger promises to gift $10,000 to Black or Latinx businesses.
Through its cashback programme, users can also divert rounded up change to one of three causes. These are Goodr, the National Association for the Advancement of Coloured People (NAACP), or the United Negro College Fund (UNCF).
And simply by opening an account with Greenwood, a user can feed a family of five a meal through Goodr, a company which helps firms waste less food.
Just like US rival Chime, Greenwood users can also get their pay two days early. The challenger mentions savings accounts too, but it is yet to reveal how competitive the rates will be.
Similar movements in the UK
The US has seen Latino-focused fintechs such as Viva First and Crediverso crop up in recent months. But Greenwood is one of the first Black-founded and led digital banking service to crop up in America.
UK challenger Atmen, founded because there were no Black British-led high street or digital banks, has also recently launched.
Members of the Windrush generation set up the UK’s first credit union back in 1964. Today, credit unions in the UK boast some two million members. But to date no established, Black-owned, UK-founded bank exists.
“Looking back at history, loans have become more accessible, but with accessibility comes paying over the odds in interest and falling into the high-risk categories,” says Atmen co-founder Marvyn Smith.
Taking a different approach to Greenwood, Atmen will set up a peer-to-peer (P2P) offering, before moving into business loans.