Bloom Money raised a round:

 

Bloom Money, a U.K.-based fintech, has raised £1 million to digitize an informal financial management system employed by ethnic communities across the world.

 

Often referred to as “rotating savings and credit association” (ROSCA), the model varies in the details around the world, but usually, it involves an informal gathering of people from a certain community who act as a bank, collecting and saving money that members can withdraw. The system is called different names across the world, such as “hagbad” in Somalia or “pardna” in parts of the Caribbean.

 

The goal is to avoid conventional banking systems, many of which discriminate against minority communities, especially in the U.K.

So what?

In the interest of full disclosure, I will say upfront that Bloom Money’s co-founder and CEO, Nina Mohanty, is a friend of mine and a brilliant human being, and I’m personally delighted that she has hit this impressive milestone!

 

Nina was also the guest for the single most popular episode of the Fintech Takes podcast – Fintech’s Biggest Unsolved Problems.

 

[OK, now I’m putting my fintech analyst hat back on.]

 

This is a really interesting concept. The basic idea here is that in many cultures around the world, saving and lending money are inherently social activities conducted informally within tight-knit family and community groups. And rather than attempting to convince new immigrants to give up the ROSCA model and move to a more individualistic system, perhaps we should start by digitizing the model that they are already comfortable with.

My assumption is that Bloom will use these savings clubs as a very gentle onramp into the broader U.K. financial system, which will present additional opportunities for product expansion and monetization.