News Latin America The Mexican ‘fintech’ Klar obtains a line of credit for 100 million...

The Mexican ‘fintech’ Klar obtains a line of credit for 100 million dollars

The Mexican ‘fintech’ Klar obtains a line of credit for 100 million dollars

Stefan Moller, CEO of Klar, poses for a photograph in Mexico City in July 2022.KLAR (via REUTERS)

The digital financial services company Klar has obtained a credit line of 100 million dollars to expand its products in Mexico, a country with one of the lowest banking rates in the Latin American region. Without being a bank, Klar offers credit cards and investment products to more than two million customers who manage them entirely from its digital application. The loan deal comes at a time of low fundraising for startups in Latin America.

Mexico has been an attractive market for Sociedades Financieras Populares, or Sofipos, companies that offer loans and investments without being banks. Klar, along with Nubank and Uala, have attracted millions of Mexican clients who have been excluded from the banking system, one of the most heavily regulated sectors in the country. The acquisition of the line of credit by the US investment firm Victory Park Capital (VPC) will allow it to expand its clientele, which already reaches 2.4 million Mexicans, according to the CEO of Klar, Stefan Moller, to Reuters. The fintech It offers loans ranging from 1,000 pesos (59 dollars) to 30,000 pesos (1,760 dollars) and now they are looking to try loans of up to 40,000 pesos.

“Every three months we reassess the size of the credit line,” Moller told the agency. “But we want to see how to speed that up, bring it down from every three months to every month.”

Founded in 2019, Klar raised $90 million in financing in June of last year. The sector of fintechs has navigated the lack of resources for the startups better than others this year due to its rapid growth. Technology companies in Latin America posted their lowest level of funds raised last quarter, according to data from industry consultancy CBInsights. According to Moller, 90% of the population in Mexico does not have a credit card, while half do not have a bank account. Unlike banks, which must go through a compliance and capitalization process to maintain their license, fintechs can offer some financial services with fewer requirements. In addition, they have lower costs, since they do not need to have a physical presence through branches.

Part of the attractiveness of the business of the Sofipos in Mexico that operate as fintechs is that they collect data from their users that feed algorithms to design custom products. “Klar’s data analysis capabilities are the fundamental pillar to customize its lines of credit, accounts and products to provide solutions tailored to its customers,” the company explained in its statement.

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