Rather than relying on political power, meaning relying on government policies to address pressing social issues such as the racial wealth gap, as most people unsurprisingly do, Wole Coaxum, a former Wall Street executive and now founder and CEO of MoCaFi, decided to rely on markets to address such issues, and he is well on the way to solve those issues for the most in need.
MoCaFi, which stands for Mobility Capital Finance, Inc. is a New Jersey-based fintech corporation serving Americans who exist in the economic margins as unbanked or underbanked. The company was incorporated in 2015 in Newark, New Jersey by Wole Coaxum, a former JP Morgan Chase director.
The former Wall Street executive is very sensitive to the socioeconomic issues that touch the Black community. Issues such as crime, violence, police brutality, and the lack of financial resources in Black neighborhoods are close to Mr. Coaxum’s heart. He believes that he could address racial inequalities by providing a service to not just Black people, but any underserved community that needs access to the financial system. What motivated Coaxum to start MoCaFi was the killing of Michael Brown in 2014. In a 2020 interview, he stated:
“I recognized that the community where Michael Brown lived—a working-class neighborhood outside of St. Louis (MO) where the per capita income is $21,210 per year (according to the U.S. Census Bureau of 2018), would not offer the financial resources that would allow the residents to empower themselves…I knew that I wanted to use my training to create solutions that addressed the lack of access to financial solutions and address the wealth gap.”
Coaxum felt confident that he could use his experience in financial services and connections to some of the finance industry’s most important leaders to do good.
Last week, one of the country’s largest banks entered into a partnership with MoCaFi to help underserved populations access its services. The Bank of New York Mellon Corporation announced that it will use MoCaFi digital payment technology to help the bank’s government and corporate network reach consumers who are connected to traditional financial services. MoCaFi raised $23.5 million from the Bank of New York Mellon Corporation, Commerce Ventures, and other financial institutions in the Series-B round of funding.
The goal of the alliance is to help two groups: unbanked households, where no member operates a checking or savings account at a bank or credit union; and “underbanked” households, in which at least one member has a bank account but does not have access to other basic financial services.
According to a survey from the FDIC, 5.9 million households, or 4.5%, were unbanked in 2021, and 18.7 million, or 14.1%, were underbanked. Unbanked rates are higher among Black and Hispanic households, as well as low-income households, the FDIC reported. On average, unbanked and underbanked Americans spent $3,000 annually per person on fees and interest on financial products in 2018. MoCaFi’s platforms include a bank account that provides no-fee cash withdrawals at certain ATMs. MoCaFi adds that connecting underserved populations to the banking system will help lower fees for underbanked Americans, who typically have to pay higher fees when cashing checks or purchasing money orders.