Gustavo Romero
Director General
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AI to Differentiate from Traditional Banking: LendInc

By Andrea Villar | Thu, 06/18/2020 - 05:00

Q: What does LendInc offer to the Mexican market?

A: LendInc is a subsidiary of Innohub, a digital company builder that offers financial and credit solutions to SMEs. One of the advantages of being part of this ecosystem is that as an entrepreneur you do not start from scratch since the experience of the company builder already exists. LendInc was launched in 2019 as an option for potential borrowers. We consult a variety of data sources, both public and private, to arrive at a credit profile of the company, which we channel to different financial partners, whether those are banks, Sofomes or fintech companies. In September of that same year, we began offering the loans ourselves. If for some reason, the client’s profile does not fit with LendInc's business model, we transfer them to our financial partners.

We also provide credit reports for financial entities or retail companies that allow them to analyze their suppliers. These studies are useful in the retail industry because they help companies determine whether or not they should work with a specific provider. In the case of financial companies, we act as a complement to their credit analysts. Although they already have their qualification process for borrowers, we provide them with an analysis of their potential customers in a matter of hours.

As a response to the pandemic, LendInc launched a financial health report, where clients can see in a very simple way a variety of metrics related to their business, such as their historical billing and projections regarding expenses, clients and suppliers, cash flow, as well as recommendations to overcome the crisis. Also, this report gives us an idea about whether these companies are eligible for a loan from us.

Q: How does LendInc differ from traditional banking?

A: We do not ask for any physical information; everything is digital. Traditional banking requires account statements and these banks then review the documents manually. Instead, we review data digitally, which makes the process more agile. One of our greatest advantages is that, besides having access to the same data as banks, we provide a response to the client in five minutes and we also explain to them the reasons behind our decision to grant them a loan or not.

In aftersales service, AI plays a very important role. We use customer data predictively, meaning that we can anticipate customer behavior and we can even inform them about the trends we observe in their handling of credit. According to INEGI, by 2018, there were more than 4 million SMEs. Our main goal is to have 33 percent of that market and we are confident that we can achieve it by the end of 2021.

Q: Given the crisis generated by COVID-19, has LendInc seen an increase in SMEs requesting business loans?

A: We have seen a 25 to 35 percent increase in credit applications. It is clear that due to the current situation, credit risk has also increased. Most of the companies that have applied for loans have a riskier profile since they are from the industries most affected by the pandemic, such as restaurants, gyms and the entertainment industry.

Given this scenario, LendInc made modifications to our risk parameters to adjust to this new reality. However, we are open to the public and we are here to support SMEs. The strategy that we are implementing is to analyze the company and its credit request based on our financial health report. In this way, we can tell the client what their best option is. There are times when applying for credit can be the final straw for a company, which can boost or indebt it.

Q: Besides the increase in credit applications, how has LendInc taken advantage of the current situation?

A: We believe this situation has opened up many opportunities. We are seeing that companies are proactively entering into strategic alliances with other players and even competitors. Being open to listening to the experiences, failures and achievements of others has come more naturally in this extraordinary situation.

Similarly, companies have accepted our financial health report very well. Our main objective is to provide them with support and to be able to tell them the reasons why they can or cannot receive credit and give them advice. At the end of March, the Latin American Association of Micro, Small and Medium-Sized Enterprises (ALAMPYME) said that 4.5 million MSMEs were submerged in uncertainty and that by then, there were already losses of MX$30 billion (US$1.36 billion), which could grow to MX$250 billion (US$11.3 billion) depending on when the health emergency really ends.

Q: What strategies are you implementing to retain the customers you gained during the pandemic?

A: In a post-COVID-19 reality, companies will need customization of their financing. LendInc is developing new products that adapt to this new normality. We listen to our clients' needs and if we cannot offer them a solution, we can potentially partner with other companies to serve them. We have an alliance with Santander in Mexico where we work as its digital partner.

LendInc is a digital platform that offers loans to small and medium-sized companies through AI

Andrea Villar Andrea Villar Journalist and Industry Analyst