Neobank Stretch wants to bank people with a history of convictions

A former Citi and Barclays executive is teaming up with a fintech entrepreneur to launch a neobank aimed at providing banking services to those impacted by incarceration.

Yasaman Hadjibashi and Keith Armstrong are the husband and wife team behind Dallas-based startup Stretch.

“Our goal is to help people expand their earning potential, but our mission is to help anyone affected by incarceration earn and manage money,” said Hadjibashi, who spent 10 years working in consumer banking at Barclays and Citi before making the switch. to the fintech entrepreneur.

Hadjibashi said she and Armstrong always had a desire to build a business that would have a positive impact on society.

Hadjibashi met Armstrong through a Techstars program in South Africa. Armstrong brings fintech experience to Stretch, having founded Abe.AI, a conversational AI platform that was acquired by Envestnet Yodlee in 2019.

“A key theme that we have always focused on – him as a fintech entrepreneur and me as a corporate intrapreneur at two major banks – has always been the lack of focus on helping people earn more. money rather than just what happens once you get it paycheck and take it to a bank,” Hadjibashi said. “If you don’t make enough money in the world, then you run another credit product or allowing you to access your paycheck two days in advance is simply not the solution to your root cause.”

Through Stretch, Hadjibashi and Armstrong focus on the specific struggles faced by formerly incarcerated people and their family members, pain points that aren’t sufficiently addressed in mainstream banking, Hadjibashi said.

The business is still in its infancy, Hadjibashi said, adding that Stretch currently has less than 1,000 customers.

The startup rolled out the platform to a limited audience through collaborations with several partner organizations, including the Los Angeles-based Anti-Recidivism Coalition.

Hadjibashi said she plans to launch the platform to a wider audience by the end of the year.

Through its partnership with Evolve Bank & Trust, the neobank offers a current account with no minimum balance requirement or monthly service fees.

At first glance, Stretch is not unlike other digital banks that offer free services, but what sets the platform apart is its focus on helping members land a employment, a hurdle many formerly incarcerated people face upon release, Hadjibashi said.

“It’s an emotional burden for individuals when they send dozens and dozens of resumes to employers and they don’t know whether they’re hiring ex-convicts or not,” Hadjibashi said.

Stretch’s app is integrated with Honest Jobs, a platform that helps people with conviction histories find jobs faster, she said.

Stretch also allows members to purchase a course with Ed Hennings, an entrepreneur who spent 20 years in prison before starting his own trucking business.

“It’s basically a master class to help people, step by step, learn everything they need to start their own trucking business,” she said, adding that interest for trucking as a career is high in the community targeted by Stretch.

“Box trucking is a specific route that has no high barriers to entry. You don’t need a commercial driver’s license or start-up capital. So we’re very happy to have started this with people in the community,” she said. “We want to be their partner, helping them transition to entrepreneurial paths associated with strong pay, a strong economy and recession proof.”

In addition to helping formerly incarcerated people secure their jobs, Stretch also aims to bring people into the banking fold.

A Financial Health Network 2021 Report found that 29% of formerly incarcerated people did not have a bank account before their incarceration.

This figure is more than three times higher than the average rate of unbanked people over the past 10 years, according to the report.

For people who had bank accounts before their incarceration, many have had their accounts closed due to monthly fees or overdraft fees that accrue over the length of their sentence, Hadjibashi said.

It can also create a “negative banking history”, leading some banks to reject applications, she added.

Formerly incarcerated people may also find it difficult to present proof of residency or proof of identity accepted by the relevant service provider, Hadjibashi said.

“There are a number of challenges these people face that make it difficult to consistently say opening a bank account is easy,” she said.

Stretch’s current revenue model relies heavily on interchange, the fees collected when account holders swipe their debit cards.

Going forward, Hadjibashi said she would like to introduce credit building products and loans on the platform, as well as expand her online entrepreneurship courses.

“If we could help the thousands of individuals and their larger family ecosystems find stability so that they can truly pursue opportunities in life, I think I would be very proud of us and what we have achieved” , she said.

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