Binta Financial’s Innovative Solution to Help Newcomers Build Their Credit History in Canada
Paschal Okwundu, founder of Binta Financial
Paschal Okwundu never imagined his own experience as a newcomer to Canada would become a springboard for his fintech startup. However, after hearing how many others went through similar – if not worse – experiences, the serial entrepreneur knew a solution was hidden somewhere. It all started when he moved to Canada from Nigeria eight years ago as an MBA student at the University of British Columbia and struggled to find housing. “Between the first day I landed and a few weeks later, I had to speak to at least six different landlords before one finally agreed to rent their place to me. And the simple reason was because I did not have a Canadian credit history, even though I worked in banking in Africa,” he says. A few years later, Paschal was working for Royal Bank and trying to purchase a car. The dealership offered him the vehicle at a steep rate – 13% – again blaming his thin Canadian credit history. As he continued working for some of the country’s leading financial institutions, he would help businesses identify problems and guide them through how to fix them, making them more efficient. Meanwhile, in his own life, he saw the same problem crop up again and again“ My mindset was already wired to us thinking about problems and then, most importantly, finding solutions for them,” he says. “I kept encountering a recurring issue: friends moving to Canada would frequently call me for help. They needed a guarantor to rent a place and access financial services, and some even faced the burden of paying six months' rent upfront or had to buy a car in cash, sometimes for over $30,000. I don't think this should be a 21st-century problem. Somebody had to fix this.”
That’s how Binta Financial was born. Users download the app and create a profile, inputting basic information about who they are and where they live, along with their rental details. From there, when they pay their rent every month, they can just go to the app, provide proof of payment (a screenshot of an Interac e-transfer to their landlord, for example), and tap submit. On the backend, that data is reviewed in real-time, and then if everything matches, it’s reported to credit bureau’s like Equifax’s, one of Canada’s largest credit reporting agencies. “This is a Canada-wide problem. When we started opening up the market, that was how we landed on the rent reporting program, which actually helps people build their credit faster. We went into Equifax to have this discussion and they said, we're also thinking about the same thing,” he says.
According to the federal Immigration Level Plan, Canada is set to welcome 485,000 permanent residents by the end of 2024 and another 500,000 in both 2025 and 2026 – all of these newcomers arriving in the country without any Canadian credit history and in need of rental housing. A shortage of skilled workers in developed countries such as Canada means more, not fewer, immigrants are needed as “persistent talent shortages continue to impede hiring efforts”. From the construction industry to agriculture, to education and healthcare, just about every sector is in search of more workers. As municipalities across the country welcome newcomers, many of them are arriving in their new cities only to hit a wall when it comes to their credit history. It used to be the only option for newcomers looking to build credit was to take on debt, getting a credit card to help them build their credit. However, this provides another avenue, one already working in other countries. “I saw this was working in the U.S. already,” Paschal says. “In the States now, I think most people know your rental payment has a direct impact on your credit score. In Canada, this is still relatively new. So part of our mission is to make sure we are not just offering the solution. We are also making more and more people aware that housing is a problem. You pay a very exorbitantly high amount in rent that should be able to do a whole lot more for you beyond just meeting the rental obligation with your landlord, but also build your credit history with that.”
Paschal and his team were recently at Collision in 2024, pitching the innovative startup and exposing Binta Financial to a new audience. “We saw some names that we wanted to work with, and we thought being there, having in-person conversations would be much better than sending a bunch of emails,” he says.
To date, hundreds have signed up for the app and more upgrades are coming. Ultimately, the goal is to help folks settle in their new home and the company is looking for partners across the ecosystem who are working to do the same, something the Black Entrepreneurship Ecosystem Map (BEEM) was created to help facilitate. Paschal says they’re trying to partner with anyone from immigration agencies to government, settlement agencies or banks – anyone who wants to support newcomers. Binta Financial’s goal is to make people's experience of coming to Canada as seamless as possible. “Canada has been an incredibly welcoming country, and most people jump into the country with that excitement, only to come here and realize that there are issues you must deal with before you settle,” Paschal says. “Part of what we're trying to do with Binta is to help people on that journey.”