economics
TEFARI BAILEY
Founder and CEO of Hutsy Financial Revolutionizing Finance and Banking for Canadians by David Messiha
T
efari Bailey is on a mission to make financial wellness attainable for everyone, regardless of their financial situation or background. The CEO and founder of Hutsy Financial wants people to build and establish their credit history. After a life-changing experience on CBC’s Dragons’ Den, Bailey intends to lend a helping hand to individuals abandoned by big banks. Bailey speaks below about what inspired him, and how Hutsy provides a smart alternative to how Canadians save and spend.
Photo courtesy of Elle White Studios
What made you interested in business development? Before touching base on what inspired me to do this, I think it's important to note my experience in this industry. My experience in the finance industry saw me working at TD Canada Trust, doing everything from the entry-level teller position, all the way to a financial and investment advisor, working in lower-income areas. I had a ton of people coming to see me on a daily, weekly, and monthly basis to get a short-term loan for an emergency that may have happened. Like a car tire popping, the need to put food on the table, or getting an emergency surgery. It wasn't me approving or declining these people, it was an algorithm. The majority of people that were declined would go to the payday lender in the same plaza to get an insanely high-priced interest loan. Over time, as their financial advisor, I noticed their financial health deteriorate. It got to a point where they were getting payday loans from institution number one to pay off institution number two and getting paid from institution number three to pay off institution number two. They were just trapped in that cycle of debt that they couldn't get out of. I always knew I wanted to do better. I wanted to build a bank for marginalized communities and lower-income Canadians.
What was your experience like on CBC’s Dragons’ Den? I was on CBC’s Dragons’ Den where I was able to pitch my idea to all the Dragons. It was a great experience. Normally, I don't have an issue when it comes to pitching my ideas to anybody, but this time, it was a bit overwhelming because of all the Dragons that I was able to see on TV for many years. All the “lights, camera, and action” was overwhelming. Fortunately, we were looking for $500,000, and we were able to get the $500,000 from the partners that we wanted.
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the EDGE Spring 2023
Hutsy is a neo-bank. What is neo-banking and what are the benefits of neo-banking compared to other traditional financial institutions? The term neo-bank means it's all online and digital. We don't have any physical locations like other financial institutions, like one of the big five banks, for example. They have thousands of employees, and tons of office space across Canada and the United States. They have all this overhead cost. Since we are online and digital, we don't have to pay those marginal expenses that they do. We're playing in a giant category in banking where the five banks control 95 per cent of assets under management. We are able to reward the end-user with a better user interface with lower costs, or even no cost in some instances. We are also able to add on subscriptionbased products to make our offering profitable.
How many have signed up for the Hutsy card? What are its advantages? We currently have about 35,000 people that have signed up and are ready to go, once we launch our product in February 2023. With the Hutsy Card, we are providing the first debit card in Canadian history that builds credit with every purchase you make. Secondly, it provides early access to payroll, which means individuals never have to use a payday loan again, as long as they have direct deposit set up with us. Thirdly, there is a no-fee banking solution. Instead of paying a monthly fee for your bank account or your checking account, it's completely free with us. Fourthly, you get cash back on all purchases instead of having to use a credit card to get cashback; you couldn’t do that with a debit card before. //
