Fintech Company Stratyfy Partners Up To Address Racial Disparities In Lending
Stratyfy offers accurate, dynamic, and equitable credit underwriting decisions with machine learning solutions, working with institutions to implement AI.
Their mission is to accelerate financial inclusion for people and mitigate risk for financial institutions.
They address operations such as automated credit risk assessment, fraud detection, bias mitigation, and other tasks without new risks.
The Beneficial State Foundation is a team of equity champions who aim to advance financial justice and impactful systematic change in communities and the banking system.
Stratyfy announced its partnership with BSF on its Underwriting for Racial Justice program further progress the lending gap.
Together they have launched a two-year pilot program, unlocking capital for people of color and leading to wealth-building in historically under-resourced communities.
Twenty lenders will leverage Stratyfy’s technology to predict creditworthiness without bias and refine their loan policies to drive fairness.
The lenders include Beneficial State Bank, Community Vision, Montecito Bank & Trust, Texas National Bank, and Washington State Employees Credit Union.
“The innovative leaders selected for the URJ program are redefining how people of color in their communities can access credit, and Stratyfy is the technology chosen to deliver the collective insights and recommended actions to make it happen,” said Laura Kornhauser, Co-Founder and CEO of Stratyfy.
The program and Stratyfy’s solutions will allow lenders to convene, share and learn with peers doing similar work, furthering collaboration and a continuous exchange of insights among this group of financial institutions.
Racial Disparities in Lending
A recent study by Lendio highlighted the extent to which locations in the States can impact the success of Black and Latina-owned businesses as they continue to face challenges, including lending limitations.
It found that Latino-owned businesses are only half as likely as their counterparts to receive the funding they apply for, and fewer than 1 in 20 Black-owned companies survive the startup stage.
It also showed that 52% of white entrepreneurs are fully approved for financing compared to 27% of Black applicants.
“As a former chief credit officer of a community development financial institution, I understand the importance of taking tangible actions to address the systemic racial disparities in lending,” said Shannan Herbert, Executive Vice President of Inclusive Credit at Stratyfy.
Stratyfy and Beneficial State Foundation are committing to addressing the longstanding inequities and helping promote fair lending practices with innovative technology solutions.