Aura Completes $25 Million Social Bond Securitization; Drives Social Impact, CRA and Economic Returns for Investors
Unique crowdfunding effort for loan funding supports mission to build financially healthy low-income communities
SAN FRANCISCO--Aura, a CDFI-certified fintech company disrupting the predatory lending industry, today announced the results of its recent debt crowdfunding effort having completed 15 private market securitization issuances for a total of $247M. Aura is an innovator in social capital, creating a direct-to-investor micro-securitization platform that supports the company’s mission to build financially healthy low-income communities.
Aura’s investment opportunities hit a sweet spot for individual and institutional investors looking for higher-yielding, fixed-income products that positively impact society. Aura’s proprietary securitization platform is unique due to the short duration and high transparency these investments offer, in addition to the social coupon investors receive. Financial institutions and foundations can also fulfill their Community Reinvestment Act (CRA) and program-related obligations by investing in Aura securities.
Aura closed its seventh micro-securitization of $25 million in June backed by more than 20,000 of its responsible, credit-building loans, for an aggregate of $145M in less than two years. This is in addition to the eight prior issuances totaling $102M that Aura closed from 2013 to 2016. These were backed by loans purchased from third parties in order to establish the company’s proprietary securitization capability.
“With fifteen successful bond issuances behind us, we’ve established a new securitization platform that helps banks, foundations and social impact investors recycle capital back into our low-income communities,” said James Gutierrez, CEO of Aura. “Aura’s approach is a game changer for the social capital world that allows us to expand our loan-making services to people in need at increasingly lower costs.”
Certified as a Community Development Financial Institution (CDFI), Aura has a track-record of responsible lending. All loans are rigorously underwritten to ensure a borrower’s ability to repay and are structured for borrower repayment success. On-time payments are reported to major credit bureaus, so borrowers can build their credit scores. Aura’s small-dollar loans, widely accessible via its partner network, gives consumers in banking deserts or harmed by predatory lending practices access to affordable capital. To date, Aura has provided hundreds of thousands of loans to low-income households in the U.S. and has helped improve credit scores for those who take a second loan, by an average of 312 points.
Aura’s mission is to build financially healthy low-income communities and end reliance on predatory payday lenders by providing affordable credit to America’s 66-million underbanked and unbanked. Aura loans are designed to help borrowers succeed at repayment and build good credit. 67% percent of its repeat customers grew their credit score by an average of 312 points when applying for a second loan. Currently available in more than 700 locations across California, Texas, Illinois and Arizona, Aura has provided hundreds of thousands of loans to low-income households since launching in 2014.