Fig Tech Inc.

Working with non-profits to provide credit building products that bridge families from income volatility to financial stability.

Our non-profit partners identified predatory high interest debt as the largest barrier to successful client financial outcomes. Predatory debt amplifies financial duress, creating a cycle of depleted income and inability to focus on work. Instead of maximizing the impact of their income, clients spend close to 25% of their monthly income on overdraft fees and other costs associated with operating on the fringe of mainstream banking.
Fig addresses this problem not only by providing emergency credit that is 70% cheaper but also with a path to access mainstream credit. Fig lends directly and gives (free of charge) our software to local organizations like non-profits, employers and churches to set up their own lending programs.
Our approach combines cash flow-based underwriting, machine learning enabled operations, and consumer-centric product design to help the most hard working and vulnerable citizens. By setting clients on a path to mainstream credit, Fig empowers individuals and community organizations to take agency over the fruits of their labor.

Fig competes with incumbents and alternative products through our mission alignment and underwriting technology. We are the only lender that partners with non-profits and consumer advocactes as a core part of our business model. Our network of relationships offers unparalleled credibility and access to customers. In technology, Fig is the only company with end-to-end proprietary software. This results in perfect information flow between all areas of the business, creating best-in-class data for modeling. The result, our acquisition cost is a fraction of competitors and the model created by our team of 4 outperforms Elevate's best vintages (https://seekingalpha.com/article/4167792-elevate-credit-2018-q1-results-earnings-call-slides).

Our technology creates financial inclusion by making subprime lending efficient and passing the savings onto customers. Traditional financial institutions today are unequipped to cost effectively evaluate complex variables.

Our underwriting technology was specifically created to analyze large amounts data and calculate variables like income volatility. We make credit decisions by automatically processing the rich data in a borrower's bank statement. Similarly, our customer service uses machine-learning and AI to deliver personalized service at low cost versus traditional callcenters.

These reduce costs and creates savings for customers. Saving is a necessity for low-income workers, enabling them to participate in the rapidly-evolving digital-economy.

Our key business metrics today are loan performance and originations. From an impact perspective, our key metrics are $ saved in fees paid to predatory lenders and impact on customer's credit score.

Our top three goals over the next year are to 1) become a federally certified Community Financial Development Institution (CDFI), 2) partner with a local bank to provide our first formal referral program to traditional credit products, 3) successfully pilot Fig36, our lending-as-a-service solution, with 5 local community organizations.

My vision for Fig is to have our products define the standard for financial services in communities worldwide.
We have been active participants in every one of our communities; contributing not only as a corporation but also as citizens. Every local partner has met Fig team members face-to-face, and can confidently say Fig is a force for good in their community.
American financial institutions are plagued with low consumer approval ratings. Fig is changing that by building a private-public partnership that is supported by all community stakeholders. This is done by actively catering to economic needs at the local level.

This is most often borrowers who would otherwise be payday loan customers. Whether it's because of past credit mistakes, socioeconomic or cultural reticence towards credit, or lack of financial literacy, one third of Americans are shut out of the major benefits of the digital economy, access to credit.
When our customers experience income volatility or emergency expenses, the only financial-institutions they can access are short-term credit or fringe banking services like title, pawn or payday loan shops. For this reason, the Fig Loan is targeted towards responsible borrowers who live paycheck-to-paycheck and want to build credit towards a better future.

We have funded 4173 loans to date, totaling over $1.6M, all in the state of Texas. We measure impact in two ways, predatory loan interest + fees saved and customer credit score improvement. According to the Pew Charitable Trust, 'on the average payday loan size of $375, borrowers pay about $520 in interest'. Using this metric, we have saved customers $1.85M to date. For credit score improvement, we conducted a study with TransUnion that found our borrowers increased their credit score on average 47 points in their first year with Fig!

Fig was founded by Jeff Zhou and John Li. Growing up in low income immigrant households, Jeff and John know firsthand the duress caused by cash flow challenges. Fig is designed to catch people who fall through and provide the resources to bridge them back.
Fig is advised by Chris DeVore (Managing Director at Techstars), Peter Fader (Wharton Professor of Marketing), Shivaas Gulati (Co-Founder of Remitly) and Ann Baddour (Head of the CFPB Consumer Advisory Board). Fig's community advisory board in Texas includes leadership from United Way, Family Services and Houston local government.

Fig originally started as a collaboration with the United Way, operating as a direct lender providing credit building alternatives to payday loans. We saw that our non-profit partners had difficulty creating their own community lending programs. They often had the dollars but lacked operational resources and expertise. For example, one of our partners runs a small loan program with 1 FTE tracking loans on an Excel spreadsheet and collecting cash payments in person. This inspired Fig36.

Fig36 is a turnkey lending-as-a-service program that addresses the pain points of operating a loan program by providing Fig's software, compliance, underwriting, customer service and credit reporting free of charge. Partners setup their own robust loan programs, clients borrow at lower rates, and Fig builds even better future products using the pooled data. Fig is not going to individually solve income volatility and credit access. The best solution will come from leveraging the grassroots expertise of our non-profit partners and building tools to augment their capabilities.

Fig has grown 10% month over month and the support from Solve would allow us to support future growth of our technology and Fig36 product. Specifically, the prize supports building our credit score simulation tool with TransUnion and two additional Fig36 pilot programs with a church and community lender.

Additionally, winning support from Solve would give our private-public partnership Fig36 model a technical vote of confidence to go alongside our coverage by the New York Times. The stringent Solve vetting process and MIT's brand will help us recruit even larger partners.

1) Dispelling predatory pricing ideas: We manage brand risk in two ways, public recognition and our community advisory board made up of non-profits, consumer advocates, and regulators. Publicly, Fig partners with well-known non-profits like Urban League and United Way. We are also a certified Benefit Corporation and seeking our CDFI certification this year.
2) Loans may underperform due to changing economic conditions.
3) Federal and state regulation in our industry. The CFPB (Consumer Financial Protection Bureau) has outstanding regulation for small dollar lending.