Sawa Credit Inc, the venture-backed startup for protecting against financial emergencies and helping others in the community address financial challenges, today announces the beta launch of its community financial support platform.
With Sawa, no one is alone. Every Sawa user has access to a community-backed emergency fund, protecting them from financial shocks and putting them on the path to building lasting financial health. Sawa is a technology platform that uses behavioral science to create a community support system for borrowers to increase financial literacy and improve access to emergency capital, addressing the wealth disparity.
Half the people in the United States own just two percent of the wealth (Piketty, 2022) and many of them are unable to bear a $400 shock (Federal Reserve Board, 2021). Most financial shocks are small dollar, and access to emergency capital of just $100 has a big impact on avoiding high-cost credit, delinquencies, and defaults. While any one household might not have the funds, the money is available in the community — with Sawa, everyone has access to that $100.
“We want to give people hope that they’re not alone in facing future financial shocks. Instead of going it alone, Sawa members are in a pod of others with shared financial goals and have access to a community-backed emergency fund,” says Charles Phillips, CEO of Sawa. “Sawa is a way to get out of and stay out of a financial hole and build lasting wealth in the community.”
The beta launch will follow several Sawa pods testing pod size, strength of member social connections, and modes for accessing the community pot, including a “ROSCA,” or rotating savings and credit association. Sawa beta is also in a research partnership with Common Cents Lab (CCL), a financial research lab part of the Center for Advanced Hindsight at Duke University, which will also have research pods in the beta.
“In the beta, we will learn how to engage community members so they can get through financial shocks and ease their financial fears together — ultimately transforming financial precarity into financial health and wealth for the entire community,” says Andrew Henry, co-founder and CFO of Sawa.
Sawa raised $3M in its seed round and has been using the venture funding on research and development. Many members of Sawa’s leadership, board, and advisors come from Stanford University’s Graduate School of Business (GSB) class of 1999. The team is guided by its board members, including Michael Spence, co-recipient of the Nobel Prize in Economic Sciences and former dean of the Stanford Graduate School of Business; David Brady, Deputy Director and Davies Family Senior Fellow at the Hoover Institution; and Brian Trelstad, Partner at Bridges Fund Management’s Sustainable Growth Fund and co-chair of the Impact Capital Managers.
About Sawa Credit Inc
Sawa is a first-of-its-kind community platform helping underserved borrowers build financial health. We tap the power of community to help users increase their capacity so they can avoid delinquency and defaults and get and stay in their homes — all while reducing risk for lenders and borrowers. Leveraging behavioral science, Sawa is a venture-backed startup founded by industry-leading fintech and business experts. For more information, visit https://www.sawa.money.