Championing financial independence for immigrants in the United States (US) is fundamental for digital banking startup, Waya. With a team also based in Kenya, fintech co-founders Aenoi Chanthavong, Hempstone Maroria, David Wachira and Renzo Sotomayor started by fixing the remittance problem.
A Zoom call that connected Washington DC in the United States (US), Kenya’s capital city Nairobi and Johannesburg in South Africa at the same time made this interview possible; just one minor example of what is now a norm in a hyperconnected world.
And yet, a concept as basic as financial independence and access to financial services for all is still a challenge on the African continent. Waya, a fintech based in the US that especially caters to immigrants, minorities and underserved communities, aspires to change this. “For us it’s that broad recognition that financial independence is not a solitary endeavor. It’s a collective pursuit.
The goal here is for us to unlock financial opportunities and provide the tools and services and resources that will enable people achieve their dreams,” says Waya co-founder Dr David Wachira.
“We find that if someone is not financially connected, or they are not integrated into the system, they are largely overlooked. As a result of that overlook, it has a huge impact on other facets of life. So we think of ourselves as coming in to actually solve that social impact problem.”
A Waya account allows you to fund your account and hold money, make instant and secure Waya-to-Waya transfers, international money transfers, and go cashless or pay online with your Waya card.
Wachira, who previously served as a finance and economics specialist at the World Bank Group, started the company in 2019 with co-founders Hempstone Maroria, Aenoi Chanthavong and Renzo Sotomayor. Coming from diverse backgrounds, they each experienced first-hand the challenges with financial inclusion.
“We were connected in the industry by circumstance, and then that circumstance led us to be friends. I met Aenoi when I was refinancing my home. He was working at the World Bank credit union that catered mostly to immigrants, so it was just a natural connection. And this was almost four years before Waya was [even] a conversation,” says Wachira. “And then meeting Hempstone – it was a chance meeting. We happened to be meeting or knew a common friend,” he adds, “and long story short, in that particular friendship, the conversation of sending money on PayPal –because he was doing a lot of website and software development – came up.”
Wachira lived in the US and was paid in dollars but had a vested interest in Kenya and encountered challenges with large- value transactions, especially when he needed to travel there, while Maroria lived in Kenya but worked for a US company and was paid in dollars but found it challenging to move his money to Kenya. “We were both experiencing this problem and we thought ‘What can we do to solve it’? That’s how we started off trying to solve the issue of payments on the remittance side,” says Wachira. “The more we spoke to other immigrants, the aspect of remittance, of course, was important because we were experiencing it. But beyond that, was the issue of larger financial access.” He adds that they determined that those remittance issues were simply a ‘symptom’ of the lack of financial access.
“…people are sending money to their family and everything else. But if you start speaking to them ‘Tell me about how you receive your income, where do you get paid?’, they are like, ‘It’s very difficult to open bank accounts as an immigrant in the US; I have to transact with a lot of cash’… Then the more we started looking at it, if you try to fix the remittance problem, which is okay, it’s more symptomatic – the root cause is financial access. So we pivoted towards that and that’s how Waya was born.”
They approached Chanthavong with the idea and he had seen the effects of these obstacles in his line of work. “In terms of the background, working for the United Nations Federal Credit Union, and the World Bank, I got to see that essentially, the guidelines or rules that was given, in terms of loans or lending, was not really catered to low-income or moderate-income immigrants like us,” he says. “I’ve worked with foreign nationals, who came from all over the world with visas, and they make great salaries, but because they don’t have the right documents – social security number – they couldn’t open up a bank account. It became just a perfect fit when David brought that up.”
According to the World Bank’s Migration and Development Brief, released in June, officially-recorded remittance flows to low- and middle-income countries (LMICs) are estimated to grow by 1.4% to $656 billion in 2023. However, as economic activity in remittance-source countries is set to soften, it may limit employment and wage gains for migrants. “For me, I can also relate, coming from an immigrant family, from Laos, during
the Vietnam War. And when you’re settled here as a refugee in the United States, there’s a lot of other things that was not given to you, because you know you have to rely on public assistance, low income and all these other stuff,” Chanthavong recalls.
“This problem that we’re trying to solve is to make sure that we incorporate or include all those minorities [that] were denied because traditional banks didn’t understand them. They didn’t understand where they came from, didn’t truly understand their needs,” he adds. “Most traditional banks typically would focus on clients that are less risky or risk-averse, right? And that was the reason. This was a perfect match. Since then, I got introduced to Hempstone and the rest was history.”
Maroria, a professional in fintech, mobile payments, e-commerce and disruptive technologies, says as an innovator, his personal experience with remittances is what triggered him to start thinking about building solutions around payments for immigrants. “Our goal really is to continuously build products and solutions within our banking offering, to make sure that we are able to give immigrants and minorities, the tools and the power they need to be able to stay ahead, especially in these countries where they live and work,” he says.
“For us, that means being able to continuously add on more services, like lending and credit, and [the] ability for these people to be able to actually access products. And then majorly one of our biggest things in the pipeline is being able to help all without social security numbers. So these, I would say, would be students, and other people that move into the United States but are not really in the system.”
“One of the key items we’ve done in trying to build innovation is us going into the different communities, understanding their user case, and then developing a product to be able to meet those needs,” Chanthavong says. The startup today has over 5,000 active users and has closed pre-seed investment from strategic investors and partners.
“We’re discovering different AIs you can embed in building better processes, for example, customer service, engagement. Rather than doing the coding manually, you have AI that’s able to read this code and something that would take you, I’m just going to exaggerate, years, takes you 10 minutes. These are the things we’ve been able to incorporate and innovate to provide better services to our customers.”
When asked about the challenges they have faced, Maroria says capital investment was the biggest, along with navigating the regulatory landscape – especially in a country like the US that is one of the most highly-regulated markets in the world – and being able to build a team, 70% of which is based in Kenya, that understands a product in the US market.
“I think maybe a crux of the problem is we think we just have one solution, and we will be the only people that can actually solve this particular aspect. We can’t be it all to everyone but what we can do is try to address a particular problem and even innovate and actually have more competition that helps solve that particular problem,” says Wachira. “If we can actually lead the way, be that tip of the spear that enables others to come and say, ‘You know what, let me build on what Waya has done’ and kind of light up the darkness so to speak.”