MICC Financial

Entering the world of credit cards and money management can be daunting as a younger individual. International students and immigrants in particular face many barriers when trying to access monetary resources such as credit cards. For instance, they may be subject to much higher interest rates or must jump through hoops to access a credit card in the first place. Jonah Chininga, Daniel Ohaegbu, James Muhato, and Sergio Fernandez recognized this, experiencing those issues first-hand as international students. With the hope of improving access to credit, they looked to digitalize a peer-to-peer lending system commonly used in their home countries, resulting in what is now known as MICC Financial.

To this day, each team member brings a valuable skill set and background to the company. Having studied psychology at UPEI, Daniel first worked as a program co-ordinator with the Native Council and Canada 150 program. He later went on to work for Overtime Management, an events and marketing management enterprise, where he connected with Jonah who had just graduated from a UPEI Business degree in 2018. The two began discussing the financial hardships they had observed amongst their international friend groups and agreed that there was a solution they could develop. “The initial idea was peer to peer lending; how can we decentralize the model so people can borrow and lend to each other without the banks in between?” Jonah explained.  At this time, they both knew James, who had completed a Business Administration degree at UPEI and was since working on policy and program development for the government. He was looking to build upon his writing skills and felt that joining the MICC Financial team would help him with reaching that goal. Although Sergio was unable to attend the CBDC interview to let us know more about his background, he is a web programmer and designer, which enabled him to assist with establishing the MICC Financial App and overall digital presence.

Together the team created a peer lending app where friend groups pay a small monthly subscription fee to open an account and pool together some of their funds on a regular occurrence. These assets are then used by each member on a rotating schedule, allowing that individual to have access to a larger sum of money which can be used to pay off debt or make larger purchases. Members then pay back into the pool over time with no interest charges. This in turn, positively impacts their credit score when paying back into the group, as their activity is reported to credit bureaus. The whole concept revolves around social peer pressure where individuals feel held accountable by their friends financially, and as a result, pay back into the pool accordingly. However, if they do not pay back on time, this will also negatively impact their credit score which gives the rest of the friend group some extra assurance. Hoping to create more discussion on financial management and goals, the team also implemented a chat on the app so that friend groups can share tips and knowledge without feeling like it is taboo to speak of their own financial situation. “It also becomes a cultural thing when we talk about money because depending on communities and societies, we all interact with money differently. So, with MICC we really wanted to emphasis the social network and your social responsibility to not only yourself, your friends, but also how that ties in with your own financial goals” explained James.

To create an additional route for building credit on a more individual level, MICC is also about to launch a card in partnership with Mastercard. Users will pre-load their own funds onto the card and then use it for everyday purchases, rent, phone bills, and utilities, which will then reflect positively on their own credit score. Ultimately, all of these services are to “Nurture (the customers) to more cost-effective loans. So, we want people to do away with pay day lending or high interest products like credit cards so that instead you are keeping more money for yourself” Jonah explained. Knowing that their app can substantially help customers with getting out of bad debt and/or allow them to build their credit score and thus access better financial services, brings them all great satisfaction. “Hearing the stories of consumers, what is close to their hearts, what keeps them up at night, and how we can solve some of their challenges is really rewarding” mentioned Jonah. “Success is seeing our platform support people” added Daniel.

To get where they are today, the MICC Financial Team received an Atlantic Impact Loan from the CBDC to pay for product development, marketing, and hiring. As a result, the team now includes six employees, a few individuals on contract, their intern Marcos, and some developers in Mexico. Going forward, the dream for MICC Financial is to “be a part of the financial system for people who do not have a great credit record. If we can tap into individuals with no or low credit, that would be the goal. But also, being a part of the conversation of spending habits and how credit worthy is determined” explained James. This all may one day mean that MICC could provide reports stating an individual’s credit worthiness based on how they had contributed to their groups. “So, you can see what loans you now have access to or the vacation you could take because you saved this much money and built your credit score up by this much”, James added. Overall, “the dream is accessibility, at the end of the day the common denominator is money and debt and if you look at the data point of finances here in Canada, most are in debt. This seems to be a very revolving theme where you trying to get out of debt but the only way to get out of debt is to get in more debt. So hopefully MICC can be that access to a more sustainable financial ecosystem for them” explained Daniel. This tool is already being used by many Canadians and the CBDC cannot wait to see what else lies ahead for the MICC Financial team and their ingenious method of peer-to-peer lending.