Money 20/20 ranks among the top annual fintech and financial services conferences in the world. Hosted every Fall in Las Vegas, and attended by approximately 7,500, the event bills itself as the heart of the fast-paced and high-stakes world of payments, banking, fintech and financial services.
To be invited to present is a rare chance to make news and launch global movements. DreamSpring was there recently to do just that.
For the first time in DreamSpring’s 27-year history, Money 20/20 organizers selected the nonprofit to lead one of its coveted panel discussions. Headlined “MissionTech: A Response to a Financial Crisis for the Underserved,” the 30-minute presentation highlighted how, in the midst of the COVID-19 economic crisis, DreamSpring, as a forward-thinking Community Development Financial Institution (CDFI), built and implemented an innovative and replicable lending model with long-term promise to make finance more inclusive and equitable.
Speakers comprised a trio of subject matter experts and DreamSpring partners:
Their discussion began with data that grabbed the attention of philanthropists, investors, and economists alike – statistics indicating the gravity of barriers in lending and the high price of economic inequality:
“So, even if you’re not concerned about the people or the businesses they run, but you do care about economics and driving growth in this country, closing gaps in financing is the way we can drive $5 trillion in growth,” Dominski said.
To follow is an excerpt of their dialogue.
FL: Small business owners, especially those from underserved populations, experienced unprecedented need for rapid funding, and many could not get access to the Paycheck Protection Program (PPP) due to limited banking experience, the size of the loans they needed and lack of relationships with financial institutions. So especially in the early days, thousands went without financial support.
DR: Ironically, the PPP provided the perfect opportunity for an innovative pivot in our industry to achieve equitable results in lending. This was no longer a matter of small businesses needing capital to grow but needing capital to survive.
FL: [DreamSpring] responded with a model we call MissionTech. It’s really very simple. CDFIs like DreamSpring have a long history of relationships with underserved communities. That is the main foundation of the concept of CDFIs. We overlay that mission with partners seeking to access those markets and the technology to reach them fast. We had the technology in place that not only enabled us to pivot immediately to serve existing clients but also to access thousands more during the crisis. We then partnered with digital marketplaces like Lendio as well as with banks and philanthropies. This trinity of mission, plus tech, plus partnerships enabled us to scale 10 times our normal lending volume in a 16-month period and access underserved markets in a way that had never been tested before.
DR: There is no more prime example of a pivot that leverages technology to serve the underserved than our collaborative PPP response. The beauty of this story is that we overcame a monumental challenge quickly at a time of crisis. Through collaboration we helped a lot of underserved small businesses, and we did it from a point of parity. Now, we’ve carved a path to continue to do this in the future.
RD: Traditional lenders can’t always serve those who need capital the most. But we can refer those clients to CDFIs. CDFIs are not only better equipped and experienced at providing loans to the underserved – they can also help underserved and underbanked borrowers increase their credit worthiness. Those clients then may qualify for loans from more traditional lenders. It’s a virtuous circle.
DR: When mission-based organizations and fintech come together, they can unlock new opportunities to develop further business. By supporting entrepreneurs that have been undermined by the system, we add participants to the economy. The bottom line is that doing the right thing is not simply a philanthropic measure; it’s a fantastic business decision.
DR: The power of collaboration between tech companies like Lendio and CDFIs like DreamSpring has shown us that equality in lending can be achieved. My hope is for Mission Tech as a notion to be eradicated because at that point we will have achieved what we’re all trying to achieve. But between now and then, we have work to do, and I see huge collaboration between fintech, CDFIs, and larger financial institutions for the sake of underserved entrepreneurs and the Mission Tech solution.
FL: I see the future as any underserved entrepreneur who is dreaming about a startup and any small business owner that wants to grow their business getting access to capital to achieve that dream. It should be as easy as getting anything else that we get instantly today online.
How you can help: Join the MissionTech Movement! Support community lenders to enable greater financial inclusivity of underserved populations and catalyze lasting change for our economy, community, and lives.