Ponce Bank Teams With Grain To Create ‘Crebit’ Cards For Underserved

Goal Is To Use AI To Teach Financial Literacy

Keith Griffin

June 9, 2020

Ponce Bank logo

New York-based Ponce Bank is teaming with Grain Technology Inc. to provide revolving lines of credit to those with little to no credit, or who’ve had their credit damaged, by transforming debit cards into “crebit” cards. The Grain app also seeks to teach financial literacy and uses Artificial Intelligence (“AI”) tools to automatically build credit history in line with the companies’ mission to extend credit and education to the financially underserved while combating economic inequality.

The two partners developed a non-traditional underwriting methodology, based upon a cash flow analysis processed by Grain’s AI engine, that enables Ponce Bank to safely make a line of credit available to individuals based upon actual income and spending patterns observed in real-time within their primary bank account.

Grain’s algorithms monitor and manage the loans, making payments automatically and anticipating upcoming shortfalls enabling them to tap their line of credit. A customer’s available credit line may be adjusted based upon real-time cash flow analysis filtered through underwriting algorithms the companies’ developed.

This automated credit management generates a credit history reported to the bureaus that strengthens the consumer’s credit scores and opens the door to traditional credit transactions in the future. The app persistently communicates with the customer about their cash flow and expenses providing awareness and suggestions and allowing them to more plan ahead, developing sound spending habits, enabling them to manage their credit and finances more effectively.

Grain was founded in 2017 looking to extend credit to communities that had either avoided it or to whom it was unavailable. It says 40% of people in this country unable to cover a $400 emergency expense. That shows a vast pool of customers need credit management skills and financial education for better financial security.

Ponce Bank is a community development financial institution and a minority development institution: two designations recognizing the bank’s role as an investor in underserved communities for over 60 years. The bank’s business primarily consists of investing deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans.

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