Gabriela Campoverde hopes to help deploy more capital to immigrant small business owners by making the process more efficient. And, she believes, if your first attempt doesn’t work out, keep trying.
When her first attempt – becoming a lender – didn’t work out, she changed direction. Specifically, she founded Miren, a business with a platform to help banks invest in low- and middle-income communities, monitor those investments, and ultimately increase the flow of capital to small businesses.
Gabriela Campoverde
Campoverde has a background in financial services, having worked at American Express and Goldman Sachs in marketing, project management and cybersecurity. But she has long been interested in fintech, and she feels frustrated by the lack of products for the working-class immigrant community.
Then, in 2020, while she was enrolled at the Wharton School of the University of Pennsylvania, Campoverde learned about the disparity in access to financing for minority small business owners, especially Latinos. And, while quarantining at home with her family in Queens, she has seen how hard the pandemic has been for much of her community.
With that in mind, while still in school, she went door-to-door talking to Latino immigrant small business owners about their finances and how they could get start-up capital. Through these interviews, she gained a better understanding of how these small businesses access affordable funding and the lack of resources available to them.
an idea and a pivot
That sparked an idea for a business that would lend money to small, Latino-owned companies, using different criteria than the usual information needed to assess a business’s creditworthiness. It will also educate borrowers on topics such as how to prepare and apply for a loan. But, “when we tried to raise affordable funding for the idea, we failed,” she said. This is largely because providers of capital perceive these as risky ventures and insist on pricing that risk accordingly.
So Campoverde adjusted and began talks late last year with microfinance lenders and others that typically lend to less risky businesses, leveraging capital from larger financial institutions. Under the Community Reinvestment Act, banks must invest in low- and moderate-income communities. Of course, it is not profitable to make these loans because it takes a long time to underwrite them. Therefore, banks are often microfinance institutions operating within these communities.
But she has found that many lenders have inefficient systems and still sometimes use manual data entry, multiple Excel sheets or many separate systems that cut and paste data from one program to another. “It’s easy for things to fall through the cracks,” Campoverde said.
Perhaps a better approach, she realized, was to develop software that would make these agencies more efficient, ultimately enabling them to serve more clients and spend more money. So Campoverde created loan origination and servicing software for microlenders, helping them evaluate applications and track loans. This also frees up time, so lenders can spend more time providing technical assistance to small business owners. It went live last fall in an ongoing pilot at two institutions.
Now Campoverde and technology lead Luke Fraker are working on another product that will allow financial institutions to monitor CRA investments and aggregate data. Microlenders and others that receive money from banks must report things like the number of jobs created or changes in company revenue. But they usually send all this information to the bank using the same different system they use internally. This means aggregating all the data they need can be a time-consuming endeavor. The new product will simplify the process and provide a more efficient and faster way to aggregate information.
Campoverde has raised about $250,000 from the competition, most of it from her recently completed AWS Impact Accelerator. She plans to raise a seed round next year.