A Nigerian tech entrepreneur, Abbey Wemimo co-founded Esusu, a fintech company with the aim to support low to medium-income renters to form rotational savings clubs and use their rent payments to build credit in America.
Wemimo’s background as an immigrant in America influenced the co-founding of Esusu. He first came to America from Nigeria in 2009 with his family. According to the New York Times, his mother had no choice but to accept a loan with a 400% interest rate so she could settle the family and also pay for Wemim’s college education.
He told the New York Times that immigrants without credit histories are usually denied loans from traditional financial institutions. “You have to go into debt to get some sort of credit history going, which makes no sense to me,” he said.
According to a study by Consumer Financial Protection Bureau, one in 10 Americans does not have credit history. The research further claims that about 26 million American adults have no histories with national credit reporting agencies such as Equifax, Experian and TransUnion.
Also, according to face2faceAfrica, the study notes that an additional 19 million have credit reports that are so limited or out of date that they are unscorable. The combined effect is that 45 million adult Americans do not have a credit score.
The situation is more pronounced among Blacks and Hispanics with a 15 percent rate of credit invisibility, compared to nine percent for Whites. To reverse the trend, Abbey Wemimo, co-founded Esusu along side Samir Goel, in order to support low to medium-income renters to form rotational savings clubs and use their rent payments to build credit.
After obtaining a degree in business management and public administration, Wemimo decided to create a scheme for immigrants like him and low to medium-income earners in America to save money and establish credit.
He co-founded Esusu Financial, a digital savings program, as well as Esusu Rent, an app used by renters in affordable housing units that boosts credit scores when rents are paid on time, according to the New York Times.
According to Inc., Wemimo and his partner have raised more than $14 million, including a $10 million Series A round in July that included Serena Williams’s investment firm. In 2020 when the pandemic was at its peak, his firm distributed $250,000 in interest-free loans to New Yorkers who couldn’t make their rent.
The journey to this point has not been smooth sailing for Wemimo and his partner. In seeking to raise capital, they encountered bias assumptions about their competence.
“Investors blatantly said they were not confident in the team on executing against the vision. Those things hurt you to your spine,” Wemimo noted in Inc., revealing that he and his partner spoke to over 300 investors to get first-round financing. He also revealed that the company nearly collapsed because of the time it took to get venture funding.
Wemimo told the New York Times that although the pandemic has been devastating to other Black businesses, it brought his business to the forefront. In addition, he’s been getting a lot of speaking engagements and managed to win six out of the 300 investors he spoke to.
The young company now has 25 employees. But Wemimo told the New York Times, “…our growth has been crazy. We’re still trying to expand and raise money from investors. It’s hard to manage everything.”