Social finance app taps into immigrant experience, expectations

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This article was published 01/02/2023 (443 days ago), so information in it may no longer be current.

Winnipeg is soon to be home to a modern spin on a centuries-old financial tool aimed at helping people — particularly in Black immigrant communities — achieve their financial dreams.

The tool (in the modern form of an app called AjoPro) is a community funding platform designed to create a localized financial system for immigrant communities in Canada. The app is based on a rotating savings and credit association (ROSCA) system that has been used worldwide for generations, formally and informally, to support community members’ financial goals.

Developed by immigrants for the benefit of fellow immigrants, AjoPro aims to create an “ecosystem that connects immigrants with a savings and contribution-laddering system.”

The app works by pooling regular monetary contributions from AjoPro members into one funding pot over set intervals or cycles (monthly, bi-weekly, etc.). At the end of each cycle, one of the members collects the money in the fund, with a different member receiving a payout per cycle.

App members are placed into groups with people who have similar purchase interests, so they can all meet their financial goals with the support of each other.

ROSCA systems have been present in Canada for decades. A 2017 report published in the Canadian Journal of Nonprofit and Social Economy Research says ROSCAs are commonly used by Afro-Canadians and this community-driven financial co-operative system has been “incubating within the Canadian diaspora for the past 70 years.”

ROSCAs provide an alternative financial service to Canadians who feel excluded from financial institutions for various reasons, such as race, income or immigration status.

The AjoPro app does not charge interest or perform credit checks, and relies on members to make the payments they’ve committed to each cycle.

While it may seem risky, the app operates similarly to community-driven financial systems around the world, turning to social connections and obligations to hold members accountable.

The AjoPro website says it assigns members a trust rating based on their payment history. This rating determines member pairings, as well as what position a member will take in their group’s cashout queue.

If someone makes a late payment, their trust rating will be lowered and cashout position will be automatically furthered, meaning they have to wait longer to collect money.

AjoPro co-founder Akeem Adebisi says there is growing interest in the app — particularly among the Afro-Canadian community in Manitoba (of which he is a part) — based on data collected so far.

Adebisi says AjoPro helps “to build an economic base for (his) community.”

He says he believes Afro-Canadians do not have as much economic power compared to other racialized groups, because money earned by Afro-Canadians is often spent and invested outside of the community.

One of the aims for AjoPro is to keep money circulating locally to ensure it supports livelihoods and businesses.

In 2021, Mary Mekwunye and her husband, Jude, were looking to save money to buy a car for their young family in Winnipeg when they were introduced to the app. They were curious enough to give it a try and started storing their savings on the platform. They bought their family car in quick time, and have now started working towards another goal.

“We are now looking into buying a house with our second savings on AjoPro, while at the same time paying-off my study loan, which I took when I went back to school,” Mekwunye says.

Saving for a mortgage down payment is the main motivation behind people’s use of AjoPro, according to Adebisi.

Bunmi Aregbesola, an adviser on marketing and business strategy for AjoPro’s parent company, Rakoomi Inc., says nearly 15 per cent of Canadians are not receiving adequate banking support and are “often forced to approach payday lenders to source for credit and finance.”

“These payday lenders sometimes charge up to 30 per cent interest, which forces people into a devastating cycle of debt,” Aregbesola says.

The app is intended to help break that cycle by giving its users access to capital at no cost, aside from a nominal one-time fee to use AjoPro, he adds.

A study from Statistics Canada says the debt-to-income ratio for immigrants is “markedly higher” than it is for people born in Canada, and mortgages are a key driver.

Aregbesola says with more than 8.3 million immigrants in Canada — 23 per cent of the population — and another 1.5 million projected to enter the country in the next three years, AjoPro is focusing on a growing market.

The AjoPro app has been downloaded more than 1,000 times, Adebisi says. He anticipates AjoPro 2.0 will hit the markets in February in response to its growing subscriber base.

The product will formally launch May 6 in Winnipeg.

This story was written for the Winnipeg Free Press Reader Bridge as part of a partnership with New Canadian Media

fpcity@freepress.mb.ca