Podcast March 30, 2022

How Stilt Is Giving Immigrants a Leg Up in Lending

With Fintech, the opportunities are endless. There are so many underserved groups clamoring for financial products that will finally address their needs.

And if you can provide, it will pay off.

That’s why today’s guest, Priyank Singh, Cofounder of Stilt Inc., started a company based on serving the underserved — and why Stilt is helping other Fintechs follow suit.

Join us as we discuss:

  • The challenges immigrants face when seeking credit
  • How Stilt helps them overcome those challenges
  • Why and how Stilt is helping other Fintechs find their footing

The challenges immigrants face when seeking credit

It’s hard enough moving to a new country, physically leaving everything safe and familiar behind you, but trying to establish yourself financially in your new homeland is still a nightmare for too many people:

  • Credit cards
  • Student loans
  • Car finance
  • Property rental applications

Although at first, they believed that the challenge was unique to immigrant students, they soon discovered its true nature as a systemic issue across the US.

Who arrives in the US for the first time as an immigrant, with enough traceable credit history to prove themselves worth financing?

The banking sector’s perspective

Where traditional financial institutions faced a barrier was in regulatory compliance.

They needed credit history to make an informed decision. If they were to waive that criterion for one segment of users, the same needed to happen for all other users, and this had the potential to collapse their credit architecture.

The banks’ underwriting challenges became Stilt’s land of underwriting opportunity. Priyank and Rohit devoted themselves to learning everything about the world of Fintechs, financial services and all the associated protocol and legislature.

“The opportunity is there is this big segment that is super underserved because they don’t have a long enough credit history. And nobody was looking at them.” — Priyank Singh

How Stilt helps them overcome those challenges

At first, it was risky. Priyank put all of his savings into the venture, followed by Rohit.

They were lending money to immigrants who, like them, had little to no credit history in the US.

Before being spotted by Y-Combinator, it was, do or die. They turned out their own pockets before they raised capital from friends in similar situations.

Stilt’s signature Fintech turning point

There were key milestones that changed the course of history for Priyank and his team:

  • They found a way to combine financial data from immigrants’ home countries with what could be accessed from within the US
  • They considered the role of educational content in the customer acquisition strategy
  • They cherry-picked the elements of the underwriting process that they would adjust and adapt for the best customer experience that they could provide

What can Stilt offer?

This is by no means a sales advertisement but while we have your attention, it’s worth highlighting which products make Stilt the go-to solution for their customers.

The foundation of everything they offer is called unsecured lending (where there are no major assets that are attached as collateral).

Why and how Stilt is helping other Fintechs find their footing

In the five years that Stilt has been around, Priyank’s team have intensely studied how to launch a Fintech that’s functional and compliant.

Going beyond even their current solution to immigrant consumers’ challenges, they have begun sharing what they’ve learned, with other aspiring Fintech companies.

This part of their offering is called Onbo, and it’s fast-tracking the journey from concept to beta testing to live production for Fintech startups. Founders and startup teams can pick and choose the specific modules that they need support with, and double down using Stilt’s resources, to achieve their target outcomes.

Why the pay-it-forward mindset?

It’s simple: Priyank knows that empowering other Fintechs will mean that the market can access new, innovative and effective products much quicker than if he had to develop it all by himself.

It’s a type of learning product with an open-source mindset. It’s servant leadership at its finest.

Fintech startup trends: build vs. buy

The type of companies that register with Onbo vary but what Priyank has observed is that they’re predominantly in credit.

The best part is they don’t all even have to be Fintechs to benefit from the knowledge base that Stilt has set up. They don’t even have to be startups. Stilt’s knowledge base is helping existing companies go to market with credit products faster than ever before.

It highlights the reality that sometimes one pioneering company, like Stilt, needs to push forward and build infrastructure from scratch, for the benefit of all others who can buy and deploy it later on, for exponentially better timelines to deliver quality products into the marketplace.

Key benefits for Fintech founders

Onbo enables Fintechs with these superpowers, which every founder dreams of:

  • Accelerated go-to-market velocity
  • Improved customer loyalty over time
  • Increased customer value and lifetime value

“You, as a company, should focus on your product and on your customer , without needing to figure out every single license and regulation piece for a loan or line of credit in every state.” — Priyank Singh

Of course it goes a lot deeper than this, which is why it’s a good idea to listen to the full episode for more details.

To ensure that you never miss an episode of Payments Innovation, subscribe on Apple Podcasts, Spotify, or here and don’t forget to check out our YouTube!

Until next time!

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