How Can Immigrants Build Generational Wealth, with Nina Mohanty
Emilie Bellet speaks with Nina Mohanty, co-founder and CEO of Bloom Money, an app designed to help diaspora communities build generational wealth. Nina discusses the significant challenges that migrants face in accessing financial services, sharing her personal struggle of opening a bank account and her journey from working in fintech to raising funds for her startup. A passionate advocate for technology, Nina believes in the transformative power of fintech to make finance fair, transparent, and accessible for everyone.
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tHE BEGINNINGS OF BLOOM
Nina's career in fintech, including roles at MasterCard, Starling Bank, and Klarna, made her realise that many financial products were designed for people like her: those working in tech or finance, with disposable income, seeking convenience through apps or services like Cleo or Plum, or buy-now-pay-later options at Klarna. These products, though popular, mainly served those who already had financial access. The term "democratising finance" was often used, but Nina noticed it wasn't truly inclusive. Today, many startups still focus on high net worth individuals, building platforms for the wealthiest 1%. This led Nina to question: what about everyone else?
Nina's own experiences as the child of immigrants from India and Taiwan, and as an immigrant herself in France, Austria, and now the UK, showed her how underserved immigrants are by financial systems. She recalled the difficulty of opening a bank account in Austria and the bureaucracy of doing so in France, even with the advantage of studying at a well-known university. These challenges highlighted a significant gap in the market: while remittance services are often improved because sending money home is common and culturally important, other financial needs of immigrants are largely ignored. A Western Union report found that immigrants send about 20% of their annual earnings home, leaving 80% of their purchasing power uncatered to – an untapped market worth £118 billion in the UK alone.
Nina wanted to create a world where financial products truly serve everyone, especially the underserved, and decided to build Bloom. This venture combines her personal connections and market opportunity, aiming to create a financial future that is inclusive and equitable. Nina wants to be proud of the financial world she's building, one that's fit for the next generation.
“ And how do you build credit when you can’t access credit? To this day, most of the credit rating agencies only allow you to build credit using a credit product. So then you find yourself applying for often a predatory interest rate credit card where the rates are 80%, 100% APR and heaven forbid you miss one payment and all of a sudden you’ve fallen down the slippery slope into debt.”
cHALLENGES THAT MIGRANTS FACE
Nina clarifies that the term "migrant" often carries negative connotations, particularly in Europe, where it's associated with asylum seekers perceived as a burden. However, she stresses that "migrant" encompasses a wide range of people: asylum seekers, settled refugees, overseas workers, lorry drivers, foreign students, tech workers, finance professionals, and even high-earning expats. She aims to redefine the term and highlight the challenges migrants face, especially those outside the high-income bracket.
One major challenge is opening a bank account. Nina recalls her struggle in France, where the bureaucratic process was overwhelming. Migrants often face difficulties with ID checks and proving their address, which are required for opening bank accounts. Without a bank account, setting up essential services like phone contracts becomes a catch-22 situation, as direct debits are needed to build credit, but bank accounts and phone numbers are prerequisites for each other.
Access to credit is another significant barrier. Credit scores, crucial for various aspects of life including renting and job applications, are hard to build without existing credit. Many migrants end up with high-interest, predatory credit cards, leading to debt if payments are missed. Even those who manage to save for a house face challenges in getting a mortgage without a credit score.
Nina also highlights the financial burden of immigration processes. For example, applying for permanent residency is a process that incurs significant costs. Visa renewals and other immigration procedures are often complicated and expensive, sometimes requiring costly immigration lawyers.
These challenges are not just short-term; they extend into the medium term and affect the ability to build intergenerational wealth.
INTERGENERATIONAL WEALTH
Nina likes the term "intergenerational wealth" because it connects different generations within families. While "generational wealth" usually refers to wealth passed down after someone has passed away, intergenerational wealth focuses on the ongoing financial support within families, particularly in immigrant households from the global South. These families often live in multi-generational homes, with grandparents, parents, and children all under one roof. For instance, Nina’s father’s family in India lived this way until her grandparents passed away. In such households, everyone plays a role: grandparents might care for grandchildren, allowing parents to work, creating a dynamic of shared responsibility.
Intergenerational wealth involves financial support that benefits all generations, even before the older generation passes away. Currently, a significant transfer of wealth is happening from baby boomers to millennials and Gen Z, often involving wills, estate planning, and trusts. However, Nina is particularly interested in making wealth-building accessible for everyday people who might not have high net worth or the ability to afford financial advisors. She wants these individuals to consider how they can build wealth for themselves and their children, while also supporting their parents or grandparents.
For many immigrant families, the first generation often sacrifices their own financial security, such as pensions and investments, to ensure their children receive the best education and opportunities. This investment in the next generation often results in highly successful children who become doctors, lawyers, or investment bankers. However, this means the financial responsibility of ensuring a comfortable life for the parents falls on the second generation.
Nina reflects on her own situation, where her parents planned well for their retirement, but she recognises this is not the case for everyone. Many immigrants work lower-wage jobs and may not achieve their full economic potential, resulting in sacrificed pension payments and investments. These sacrifices are made to invest in their children's education, who then become the primary earners.
Nina emphasises the importance of planning for intergenerational wealth now, rather than just relying on inheritance. She wants financial services to help families support each other across generations, ensuring parents have a comfortable retirement while also saving for their children's future. This holistic approach to financial planning is what Nina envisions for Bloom, aiming to make these concepts accessible to everyday people.
WHAT SHOULD WE BE DOING WITH OUR MONEY?
Nina believes that the most important thing we should do with our money is to talk about it openly. While common advice might be to save a little every month, Nina emphasises the importance of discussing money matters with family and friends. She points out that in many cultures, including her own South Asian and East Asian backgrounds, talking about money is often considered taboo. She recalls the anger she faced from her father when she asked about his income, despite her parents being relatively progressive in their approach to finances.
Growing up, Nina witnessed intense arguments between her parents about money, ranging from her father’s entrepreneurial ventures to the financial support he sent back to his relatives, often at the expense of their own family's needs. These experiences highlight the lack of communication and understanding about money within families.
Nina stresses that having open conversations about money can prevent misunderstandings and help everyone involved make informed decisions. She shares an example of friends planning a brunch where the price point wasn't discussed, leading to potential discomfort for those who might not afford it. She advocates for a culture where people feel comfortable saying they can't afford certain expenses without feeling embarrassed.
This open dialogue about money also plays a crucial role in her work with Bloom. In the early stages of Bloom, Nina spoke with a wide range of people to understand their financial needs and challenges. Her approach was to engage in conversations with anyone willing to talk, from chatting with strangers on the tube to discussing finances with Uber drivers and security guards during the pandemic. These conversations provided valuable insights into the diverse financial experiences and needs of different people, helping shape Bloom into a product that truly addresses these needs.
cREATING AN INCLUSIVE SYSTEM
Nina's early approach with Bloom involved extensive conversations with anyone willing to share their financial experiences, particularly within immigrant communities. She talked about the importance of understanding the detailed aspects of their spending, especially on children, by continuously probing and asking questions.
Regardless of background, people find money to be a highly emotional topic. They experience anxiety and uncertainty, even those who are financially comfortable. Many expressed doubts about whether they were making the right financial decisions, highlighting the need for guidance and reassurance.
People often seek advice on what to do with their money, looking for a metaphorical "angel on their shoulder" to provide benchmarks and suggestions for financial decisions, such as saving for pensions or managing debt.
Individuals think about the life events they want to achieve, like buying a house or starting a business, rather than the financial products needed to accomplish these goals. This insight stresses the importance of framing financial advice around life goals rather than products.
FEMALE FOUNDERS AND VENTURE CAPITAL FUNDING
Nina's vision for Bloom is to create a truly financially inclusive system that caters to everyone, particularly immigrants, without requiring them to adapt to a system that wasn’t designed for them. She points out that traditional financial systems were built for a specific demographic—white, straight men—leaving out vast portions of the population. Her aim is to build tailored financial products that consider the unique circumstances of immigrants, such as obligations to families in their home countries and the need to invest or save in ways that align with their specific financial journeys.
In pitching to investors, Nina faced significant challenges as a woman of colour. The statistics are stark: female founders receive a minuscule fraction of venture capital funding, and women of colour face even greater hurdles. She encountered biases and misconceptions about women's ability to build successful businesses, often having to confront stereotypes and prove her capability in ways that male founders typically do not.
Nina's experience highlights the broader issues within the venture capital industry, where lived experiences and privilege influence investment decisions. Female founders often build businesses that are not only profitable but also beneficial for society, yet they are frequently pigeonholed into the "impact" category, sometimes being advised to become charities instead of for-profit enterprises.
Despite these challenges, Nina remains committed to her mission with Bloom. Her long-term vision is to provide financial products that truly fit the needs of immigrants, allowing them to manage their finances without having to conform to a system that wasn’t built for them. She envisions a world where financial inclusion means tailored solutions that consider the diverse and dynamic lives of all individuals, particularly those straddling multiple cultures and financial responsibilities.
Nina’s journey shows us the importance of representation, understanding, and the need for a financial system that works for everyone, not just a privileged few. Through Bloom, she aims to lead the way in creating financial products that reflect the real-world experiences and needs of immigrants, creating a more inclusive and equitable financial landscape.
PARTNER
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RESOURCES
Bloom Money: https://bloommoney.co/
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