This Stanford Grad is Taking on Pawnshops with a New Credit Card Startup

In recent years, there’s been no shortage of startups offering credit lines to the underbanked. Most talk about their mission to help people establish credit, which is noble, but they’re also extending credit because — let’s face it — lending out money is lucrative.

Now, a startup founded by Stanford grad James Savoldelli has found a new wedge into the same industry, and it’s through pawnshops.

Called Pesto, it’s a savvy idea. For those in dire financial straits, pawnshops are a bank of last resort. An individual doesn’t have to have a credit line or a bank account or even income. A customer with a government ID can simply leave behind something of value — jewelry, electronics — and receive a secured loan in return for a percentage of the value of that item, plus interest. If he or she pays off the loan, that person can retrieve the item; otherwise, it’s forfeited and sold.