Augusto Álvarez
Co-Director General
Alphacredit
Jose Luis Orozco
Jose Luis Orozco
Co-Director General Of Alphacredit
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View from the Top

Financing for Everyone

Thu, 04/26/2018 - 10:43

Q: What is AlphaCredit’s business proposition for the Mexican market?


AA: We are a nonbanking financial entity specialized in two verticals: consumer lending, which includes our Crediamigo, TotalCredit and Vive brands, and loans to SMEs through our Alcanza Capital brand. Regarding consumer loans, these can be repaid via a payroll deduction or via a traditional collection through an electronic debit to your bank account. This particular product is offered to sectors that have been underserved in Mexico by traditional banks: government employees, pensioners, and the C and D socioeconomic rungs.


Our SME financing vertical has two products: leasing and factoring. We focus on the underserved SME market in Mexico where the biggest problem is the lack of access to short-term working capital financing. Our proposal addresses this with tailor-made solutions.


Q: How does AlphaCredit excel in serving the part of the population neglected by traditional banking?
 

JLO: AlphaCredit has a unique sales strategy. In addition to our wide distribution network across Mexico and Colombia, we deploy teams that use technology and vans as mobile offices to better reach our clients. We understand the characteristics of every town and their monetary needs. Our business model is among the reasons we have succeeded in this segment. Banks employ a pull model, which means that they bring people to their offices where managers sell all types of products to clients. They have this model because they need to distribute the fixed costs of having offices to all their clients through many products and they need to attract people through mass marketing.


Our business model is completely different. Unlike traditional banks, we want our salespeople on the streets. We want them to go to our clients’ workplaces, to healthcare clinics and offices located far away, to places where traditional banks think it is not profitable to have an office. Banks have a transactional business model but our business model is based exclusively on credit. Our business is based on offering the right product to our customers when they need it and with the highest customer service standards.


Q: How does the acquisition of Grupo Finmart strengthen your position and add value for your clients?


AA: Grupo Finmart was one of the industry’s founders. We combined its experience with our entrepreneurial culture. The acquisition helped us double the size of the company and expand our distribution footprint to serve a larger customer base, which is positive for creating economies of scale. In Mexico, we are present in all states through 180 offices and we also are present in Colombia’s most important cities.


Q: How does AlphaCredit's debut on international markets help it to consolidate its operations?
 

JLO: This was a great milestone for us since it was not only the largest opening transaction for a nonbank financial institution since Unifin’s but it was launched at a very attractive interest rate for our investors. It is a five-year bond that took into account much of what happened in Mexico, including the elections and other conjunctures. The bond structure strengthens our balance sheet and allows us to continue to grow and reach more customers.


Q: What are your top priorities going forward?
 

AA: We want to continue growing our consumer lending vertical both in Mexico and Colombia. Some estimates suggest that credit in general in Mexico accounts for 25 points of the national GDP. However, we believe that credit for consumption represents less than five points of those general 25 points, which means that there is still room for growth. We also want to double our efforts in leasing and factoring. The growth potential in these products is still very high as a result of the lack of credit available to SMEs. The business sector in Mexico has an impressive dichotomy. Large Mexican corporations are multinational companies that can access funding and financial markets in two weeks and place bonds easily. For them, financing is not a problem. If you are not one of these companies, obtaining financing is very difficult.