Doopla: Second Fintech Approved in Mexico
Doopla, an electronic platform that offers loans and direct investments, has officially become the second fintech to be approved under the Fintech Law in Mexico. According to Entrepreneur, the Fintech Law was created to “regulate financial technology institutions and to accompany the innovation process of disruptive technologies and the development of products and services more focused on the public, in addition to promoting more efficient, economical and attractive processes in the industry.”
Doopla’s application for approval was checked by an Interinstitutional Committee made up of six members, two from the CNBV, two from Banxico and two from the Ministry of Finance. As reported by El Economista, the company’s application was submitted on Sept. 2019, making Doopla the first company to make such a request. Doopla is now the second company to be approved after NVIO Pagos. Two other companies are on the waiting list to also be approved.
Doopla has been in the market for over six years and in that time it has lent an amount close to MX$250 million (US$ 12.4 million). It has 700,000 users and has had an annual growth of 121 percent, reported La Jornada. What sets this company apart from the rest is its low-interest rates, yield, no intermediaries and its fully online model. The requirements for users to enter the platform are an initial deposit of MX$2,500 (US$125), an official photo ID, a bank account with CLABE and signing a digital contract, according to Doopla. According to Fintech Expert, the average interest rate Doopla offers is 12 percent, the average yield is at 19 percent and the credits can go from MX$10,000 (US$500) to MX$200,000 (US$10,000).
After the pandemic, authorization processes for fintech companies became slow and complicated given that CNBV had to halt its operations for three months, as previously mentioned in an MBN interview with Luis Silva de la Torre, General Director of Fintech Mexico. Obtaining this approval is useful because it offers greater security for potential investors and it generates greater levels of trust among end users. However, this also creates a challenging environment for new companies that want to learn and grow, according to Silva de la Torre. “There are still legal gaps to be addressed, such as fiscal issues among crowdfunding companies. The sandbox idea has proven to be a sound route for the creation of fintech companies and to foster their ability to learn, improve and attract investment. However, it requires regulatory flexibility”.