In 2022, Fintech Times We posed the question, “What is the difference between a ‘fintech for good’ company and others?” This year, we wanted to hear directly from fintech companies around the world who share our ‘Fintech for Good’ ethos. Why do these companies see themselves as agents of positive change in their industry?
SmallChange.co ‘s mission is to enable property developers to raise money through crowdfunding for projects that have a positive impact on society. Eve pickerFounder and CEO.
Please tell us about your company and its business
SmallChange.co is an equity crowdfunding platform for social impact real estate development. Small Change is democratizing real estate investment by leveraging regulatory crowdfunding (Reg CF) introduced by regulators. Securities and Exchange Commission in 2016.
Reg CF allows anyone over the age of 18 to invest in projects for profit and purpose, accredited or not. This allows developers to secure funding from their own networks and neighboring countries. Investors, on the other hand, can benefit from real estate investments.
As of early 2023, Small Change has listed 43 social impact real estate and proptech projects that have raised over $12 million and invested in projects that have gone full cycle. It brings a lot of profit to the house.
Why do you think your company is a ‘forever fintech’?
There are 3 reasons. First, we are making a concerted effort to embrace minorities and women, groups of developers who often struggle to attract investors. As a result, over 60% of his published projects on the platform are led by developers who fall into either or both categories.
Second, Small Change lists only influential projects. Impact is measured by our proprietary Small Change Index, which requires a score above 60%. This scrutiny process has resulted in a project portfolio that bears little resemblance to the investments of banks and traditional real estate investors.
More than 80% are located in areas that have not benefited from investment for a long time, in addition to a large number of projects being owned by minorities and/or women. Finally, through crowdfunding, we are also opening the door to investment for everyone, not just the wealthy.
How do you measure your influence?
Our unique Small Change Index uses a variety of variables to assess impact. These include project leadership diversity, project impact on its location, community engagement, economic vitality, sustainability, environmental concerns, and more.
What more can be done to make finance more ethical, transparent and accessible?
Equitable access to capital is a missing piece in much of the real estate industry. It’s no secret that many minority and female developers struggle to find funding from financial institutions and investors.
Crowdfunding provides an avenue for developers to reach investors who are in their own circle and connected to them and the community they are building. These potential investors have a better understanding of the project’s value. But crowdfunding alone cannot address all real estate imbalances. We need to go much further.
Emerging developers don’t necessarily have circles with huge wealth. Banks and other financial institutions should aim higher. This is not about meeting our internal diversity goals. This is about providing a path to an equitable environment, and banks and financial institutions are on their way. Unless lending and investment practices change, it will be difficult to bring about significant change.
Transparency can be achieved if leaders are committed to it. Banks and financial institutions can share statistics on lending practices and agree on the industry changes needed to reach impact goals. By openly evaluating and sharing statistics like this, stakeholders will know if banks and institutions are really trying to do good things, or if they are just saying good things.