The 5 Why’s?

1) Why did you start your business? 

What problem you are solving? 

In today's day and age with more bills, debt, and subscription based services than ever before 45% of Canadians find themselves living paycheque to paycheque. And 2-3 million Canadians are taking out payday loans just to stay afloat. With interest rates so high those same consumers find themselves trapped in a life cycle of debt where they are unable to make payments to their unsecured debts, and find themselves taking out more loans just to pay other loans.

What impact are you bringing? 

The impact that we are bringing is a whole new kind of banking service to Canada. Amazing products, always caring, all in app. We are creating a prepaid reloadable card, along with a companion app that helps our clients save, invest, build credit and manage finances with ease. Along with a vertical to allow our clients to get early access to payroll so if they ever find themselves in a situation where they need fast access to capital Hutsy has them covered.

Was this created out of personal need? 

This was created out of multiple personal and professional experiences I have seen first hand. Especially with my time working as a financial advisor at a major Candian financial institution. I have had many people come to me looking for a loan, and a lot of people were unfortunately declined by our credit adjudication team due to the manner that they had sub par credit, and a ton of unsecured debt. I have seen how their financial wellbeing has decreased as they would have to go to payday lenders to get the capital since the bank wouldn’t approve them and I witnessed first hand what it means to be trapped in a life cycle of debt. I always had guilt wishing that I could do better for these clients that I have established great relationships with during my time there.

What is your main driver? / What fuels you? 

My main driver is my community, through a series of empirical analyses, the Center for Responsible Lending finds that payday lending storefronts are disproportionately located in African-American neighborhoods. African-Americans, mothers, and renters are much more likely to take out payday loans than other groups. My drive is to change the narrative and give these minority groups an opportunity to manage debt, create a financial budget, build credit, and have access to payroll advances to keep them away from predatory lenders.

2) Why should people care? 

Is this a widespread problem?

This is a widespread problem as according to statistics Canada the average net saving for Canadian households is $852. Adding to that according to Equifax Canada the average Canadian is $73,532 in debt, up 2.2% from last year. Looking at the landscape of banking and financial services. There are plenty of lending institutions, plenty of credit institutions, and plenty of banking options for consumers. But there are not really any banking institutions that seek to work with those in financial hardships and give them a path to financial independence.

Who is this affecting? 

This is affecting millions of Canadians. We measure what matters. Unlike the other financial institutions, we don’t use your credit, income, job, or prior education to define how valuable a customer you are. With Hutsy, no matter what your financial situation is we are here to help.

Who will this help? 

We have options for everyone in whether you are new to Canada looking for your first bank account, and to establish credit in Canada. Or if you are an investor that invests millions of dollars into the stock market annually. We have options for you all in the app all within Husty.

3) Why You? 

Why are you the one to bring this change? 

At Hutsy we’re building an inclusive future for banking. When we analyzed the payday lending market and realized how much structural bias is baked into the existing lending models - we felt strongly that this needed to change.

Tell me about you’re A-list team! 

Our core three starting employees at Hutsy are myself Tefari Bailey multi-time founder, Tare Kabowei who specializes in operations and development, and Shaniqua De Gannes who specializes in customer service and caring. We have all worked at big financial institutions and have seen the structural bias is baked into the existing banking models first handedly. We are also apart African-Canadians that fall into the same group where payday lending storefronts are disproportionately located. We have seen the system on both sides of the spectrum and are ready to make a change.

Was there challenges starting the business, and how did you overcome them?

There were a lot of challenges and obstacles along the way, there were many venture capitalists that did not believe in the vision, many individuals that felt we were not solving a problem and many long hard hours of figuring out what products we will launch. The way I was able to uplift my spirit and get back on track was really talking with mentors that have skin in the game. And not listen to others that have no idea what it's like to create a startup, and don’t understand what our community goes through when it comes to financial hardships. 

Will you continue to persevere no matter what comes? 

We will continue to persevere no matter what as we are doing this is a community. Social impact is part of our mission and business model - not just marketing fluff.

4) Why Now? 

Why is now the time for this to succeed? 

This is the perfect time for us to get into the market with the COVID-19 pandemic payday lenders have increased their rates and some have gone up to 780% according to VICE News. In 2019, 4.6 out of every 1,000 Canadian adult consumers filed for insolvency, either by declaring bankruptcy or filing a consumer proposal. In 2020 this number has jumped up 20%. People need financial help and guidance now more than ever.

How will you do it differently? 

We will do this differently by creating solutions for these customers, not leaving them out to focus on high net worth individuals but caring for everyone and being fully transparent.

Why hasn’t this been done before? 

This hasn’t been done before as big banks are dis-incentivised to work with these kinds of clients as it cuts into their profit margins.

Canadians reporting more anxiety and depression than ever before, due to mental health implications of COVID-19 and getting into more debt and being declined for help from big institutions isn’t helping. This is an URGENT matter that needs to be solved!

5) Why equity crowdfunding (ECF)? 

Why was ECF the right way to raise capital for your business? 

Equity Crowdfunding was the only way to raise capital for Hutsy, as we are doing this for the people we want to ensure that the public is able to invest and become shareholders in our early days. That way they are part owners and decision makers as well.

Did community/equity/equality play a role in your decision?

The community played a huge role in Hutsy deciding to go the ECF route, as I had a ton of friends and family reaching out to me on a daily basis asking to invest. So ECF was perfect for us. 

Were traditional options not effective? 

Traditional options were not effective as in the venture capital space it is really a community of who you know. Coming from the community I came from I did not have access to resources and venture capital or know anyone that was in that industry.

Tell us about the struggles you faced raising capital through other means. 

Attempting to raise from venture capital firms I felt like the only metric that mattered was money, what return we would be able to get them, how fast we would be able to grow and how much control of the company they would have. I didn’t get the feeling that most of the venture capital firms that I spoke to were as passionate about this niche as me and my team.

What specifically about Equivesto spoke to you? 

What specifically spoke about Equivesto to me was just how professional the branding and website was. Pre working with Equivesto I am amazed as to how dedicated they are to both companies and investors. Equivesto is very compliant and does it’s best to provide companies with the right information to have the greatest experience possible with Equivesto. Equity crowdfunding is still fairly new in Canada there are a ton of terms and rules that can be overwhelming to founders if you do not have a legal background. Equivesto has done an amazing job helping me and my team throughout the process whether it has been at 12PM noon or 12AM Midnight.

What would being community funded mean to you? 

Being community funded would mean everything to me and my team at Hutsy. We would truly feel like the community-powered financial institution. We're building a community-first bank. Where our customers are priced fairly, treated like a VIP, and have best-in-class products, all from your mobile phone. We couldn't be more excited to build the future of banking together with our community as investors.