Woveo Secures $2.3 Million to Revolutionize Credit Access for Non-Prime Consumers
Woveo, a Canadian Lenders Association member, has secured $2.3 million in seed funding to revolutionize short-term credit options for non-prime consumers. This new capital injection brings Woveo’s total financing to $3.8 million, following its initial pre-seed round of $1.5 million last September. The latest funding round includes new and returning investors, BKR Capital, Relay Ventures, Northpine Foundation, and others.
A recent study conducted by Chief Risk Officers at the Canadian Lenders Association revealed that over 8 million Canadians in the non-prime sector face considerable challenges in accessing affordable credit. Many are either entirely excluded from the credit market or subjected to high Annual Percentage Rates (APR). Woveo’s innovative community wallet is designed specifically to address the needs of this underbanked demographic.
The landscape of lending in Canada has undergone a significant shift following the government’s decision to reduce the maximum allowable interest rates from 47% to 35%. This regulatory change has opened up substantial opportunities for alternative credit solutions like Woveo’s, aimed at easing the burden of borrowing costs. Currently, up to 6.7 million Canadians borrow at APRs at the maximum rate.
Woveo’s suite of services includes group savings, credit-building programs, credit score monitoring in partnership with Equifax, and cash advances. The company has made remarkable strides, working with 23 communities serving 18,000 members. “Utilizing a rotating group savings model, Woveo has achieved an impressive 100% repayment rate, demonstrating the effectiveness of our approach,” says Jonah Chininga, Woveo’s Co-founder and CEO.
By harnessing the power of social collateral, Woveo is not just providing financial services but actively reshaping non-prime consumers’ credit habits. This initiative is pivotal in helping these individuals build more robust credit profiles and ultimately reduce their borrowing costs.
Woveo is committed to serving millions of Canadians whom traditional credit systems have sidelined. With this new funding, Woveo wants to expand its reach and enhance its product offering to reimagine community banking, marking a new era of equitable financial services.
Woveo, headquartered in Calgary, is a leading fintech company dedicated to redefining the financial landscape for non-prime consumers. With a focus on community-based banking, Woveo offers group rotating savings, credit building and short-term credit access.