A new black-owned digital bank is looking to make it easier for consumers to support black businesses. The new venture was started by Bounce TV founder Ryan Glover and rapper Michael “Killer Mike” Render. The leadership team of the enterprise, which is called “Greenwood,” unveiled its novel platform last Thursday. They managed to raise more than $3 million in funding in June.
Glover had been working on making Greenwood a reality since early last year. He stated that interest in the project increased after the killing of George Floyd ignited a national conversation on race relations. This occurrence has motivated many companies and individuals to lend their support to black-owned businesses and fina
The bank, which will open in January, already has a waiting list full of people who wish to open an account. Glover told CNN Business on Friday that they already have tens of thousands of people on the waiting list even though they had made the announcement only one day before. “I will say we’re in the tens of thousands,” he said. “That number is increasing by the day.”
Greenwood is a digital bank whose services are primarily accessed online. It is similar to other banks that follow this model. Digital banking has been gaining in popularity over the past few years. In 2019, a survey found that 30% of Americans either already have an account at an online-only bank, or plan to open one.
According to Business Insider, “While brick-and-mortar banks have to spend money to keep their branches open, online banks don’t have that overhead. That means there’s more money left to give customers higher interest rates on checking, savings, money market accounts, and certificates of deposit, and that fewer fees need to be charged to break even.”
Greenwood will offer a slew of features for its customers. These include a global ATM network, Apple and Android Pay services, and two-day advances on paychecks. The bank’s target audience will be black and Latino communities and anyone else who wishes to support black-owned businesses.
The bank will specialize in financing minority entrepreneurs who usually face more challenges when it comes to obtaining loans from mainstream institutions. “In order to build wealth, you need bank capital,” Glover said. “We will identify qualified entrepreneurs, business owners and creatives to equip them with the capital needed to make their dreams a reality.”
The online financial institution is named after the Greenwood district of Tulsa, Oklahoma, where black Americans established a community in the early 20th century that became so successful, it was dubbed “Black Wall Street.” Unfortunately, the district was destroyed in 1921 in a bloody race massacre.
Glover discussed the prosperity that residents of Black Wall Street enjoyed at a time when Jim Crow and discrimination were rampant. He explained that a dollar spent in the Greenwood district would circulate 36 times before it left the community. “Today, a dollar circulates for 20 days in the White community, but only six hours in the Black community,” Render said in a written statement.
Black Americans are two times more likely to be denied mortgage loans by establishment banking institutions. However, minority organizations have done much better when it comes to providing loans to non-white individuals. “This lack of fairness in the financial system is why we created Greenwood,” Render pointed out.
Glover, noting the rising popularity of digital banks, stated that major commercial banks have been slow to embrace the trend. He indicated that these companies have failed to reach out to a minority consumer base. “There were no digital banking solutions that cater to the African-American or Latinx communities until Greenwood,” he said.
Only 23 minority-owned banks exist int he United States today. Glover acknowledged that these brick-and-mortar enterprises have done a “fairly good job” at supporting minorities, but also observed that “today is a new day.” He said, “We believe there is an opportunity to continue to super-serve our community by creating a digital bank that maybe the traditional African-American, Latinx banks just don’t understand.” he added. “We certainly know the traditional larger banks don’t understand our community.”
While Trump’s unveiling of the Platinum Plan excited many on the right because of the potential benefits it could have on the black community, people like Glover and Render remind us that the ultimate solutions will come from individuals using the free market to promote prosperity. Government has a limited role in this process, as it should. But the real change will happen when more people take the reins and do what is necessary to build better communities.
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