Mexican Startup Konfío to Receive Investment from Goldman Sachs

Goldman Sachs Group Inc. is increasing the credit line it was giving to the Mexican fintech company Konfío, which focuses on proving loans to SMEs in Mexico, to US$160 million, reports Reforma. The startup, created by entrepreneurs David Arana and Francisco Padilla, mentioned that this is part of an agreement between to allow Konfío to continue focusing on its goals. Konfío is trying to disrupt traditional loaning practices for SMEs. "Traditional financial institutions continue to limit the loans they give to this important sector of the economy, which is reflected by the 9.4 percent decrease in real terms of their loans to SMEs during 2020," explained Konfío to Forbes Mexico.

This loan allows Konfío to increase the loans it gives to SMEs in Mexico. The company, which is backed up by Japanese software bank SoftBank, has given around 50,000 loans since its creation in 2013, according to El Financiero. “Konfío was founded in 2014 with an initial objective of boosting the growth of SMEs through its unique offer of unsecured loans,” the founders explained to Forbes Mexico.

The Mexican startup uses different tools for data analysis and risk assessment and has a fully digital relation with its clients. “Konfío is changing the way Mexican companies access credit, bringing to market an agile and innovative process based on powerful proprietary technology,” said Maeve DuVally, spokesperson for Goldman Sachs to El Financiero.

Having access to a credit just in time under the right conditions is one of the most important factors for SMEs, which are also responsible for 74 percent of jobs in Mexico. SMEs tend to be left unattended by traditional banks, argues Konfío. But customers that want to access a loan with Konfío can fill an application form in eight minutes and access to the funds in the following 24 hours, according to El Financiero.

The company has made large investments in the last few months to increase its capacity and competitiveness. Last year, Konfío acquired Gestionix, a company that develops cloud enterprise resource planning (ERP) systems for SMEs, to ensure an agile and efficient management of their businesses, according to MBN.