Finvero: Democratizing Access to CreditBy Andrea Villar | Thu, 04/29/2021 - 06:00
Q: What are the benefits of getting a loan through Finvero?
A: Our product is focused on two markets: retail and SMEs. Finvero aims at providing SMEs with liquidity through credit at one of the lowest rates in the market. In addition, with Finvero, any retailer can sell on credit to customers. If a user wants to buy a smartphone on credit, they can buy it from Finvero-affiliated shops at a much lower rate than the industry average for consumer credit, for instance. These companies can access credits that nobody else would give them because they were unbanked and had no credit history. There are other companies that have a similar financing model, but they are usually expensive, which does not help with financial inclusion and does not generate a positive impact. Our credits are paid by users via a mobile app.
In Mexico and Latin America, there are not many alternatives for consumer credit. Finvero seeks to change this through financial inclusion. According to the latest financial industry report released by the CNBV, 52 percent of adults in Mexico do not have access to a financial service. Many players have presented themselves as an alternative to traditional banks but have the same or higher rates than them.
According to ResearchAndMarkets, worldwide e-commerce sales will grow this year to a value of US$4.8 billion, while the global lending market is expected to reach a value of nearly US$7.9 billion by 2023. It is a huge market. So far, we have already granted more than 3,000 loans to SMEs.
Q: What challenges has Finvero identified in Mexico to reach more users?
A: Mexico has a regulation that is well ahead of its time but I think we missed out on an opportunity. We could have been pioneers in the region. Still, it is okay to be the third or fourth if we do it right. We believe that the road to financial inclusion and open banking has been slowly opening up. We have been waiting for some time for the secondary legislation to the Fintech Law, but we are confident that the process will soon accelerate. A country like Mexico deserves to have a regulation that helps to solve the problem of access to financial services.
Integrating cash and credit payments into e-commerce platforms is a huge market opportunity that has been around for a long time. In Mexico, these two are the biggest payment methods to date. Now, more than ever, that opportunity has grown due to several factors, such as the penetration of smartphones, the growing internet infrastructure in the country and the adoption of e-commerce.
Interest-free monthly payments have revolutionized sales models in Mexico. However, it remains an alternative for a very small niche of the population. Even people who do have credit cards are sometimes held back from buying because their bank does not participate in an interest-free program. Even if their card offers great benefits, Finvero can provide clients with many more. Plus, we will never let our users get too much in debt. If they reach a point where they can no longer afford to pay, they can reschedule their payment without a late fee and a small penalty.
Q: What is Finvero's strategy to grow its partner network?
A: Partnerships are our main focus. Without them, we are nothing. At Finvero, we also have a syndicated credit program with retailers. Many people hold back from buy things not because they do not need them, but because they do not have the capital to pay for them. Our syndicated credit program is a way to offer credit, with the risk being shared between two entities. We are very interested in more businesses joining us so that they can guarantee better credit to their users. A better offer will always generate more loyalty.
Finvero is a fintech that offers credit and financial solutions to businesses up to MX$10 million (US$500,000). The company also offers credit to consumers through a payment option on its partners' websites.