The Mexican online microloan platform Baubap received a US$20 million loan from Park Cities Asset Management, a Texas fund specializing in debt. With the new amount, the company intends to expand its financial products and offer three million new loans in the next 12 months.
In a statement shared today, Roberto Salcedo, CEO and co-founder, said: “We developed a vehicle that offers quick access to capital, eliminating barriers to access, with a dignified collection process without bad, aggressive, or demoralizing practices.”
Baubap offers microloans ranging from $500 to 5,000 Mexican pesos (US$25 to US$258) through an Android-compatible mobile app. The company says it uses alternative data and a proprietary AI system to assess the likelihood of repayment.
It supplements this with a financial education support platform, which “seeks to help people make better use of these loans and prepare them for more complex products in the future.”
Luis Villaral y Roberto Salcedo, fundadores de Baubap (Foto: cortesía de Baubap)
The Mexican company states on its website that users must download its app, fill out an application, and have official identification and a bank account to obtain a loan. After a process to evaluate the information of the application, through its technology, in 15 minutes, they determine the probability of payment and decide whether the loan is approved or not.
Baubap’s interest rates are 0.83% (plus VAT) for each day of the term, with a maximum APR (annual interest rate) of 300%. The payment period ranges from 90 days to 24 months, depending on the client’s request.
The company operates only in Mexico at the moment. According to its figures, it has granted loans to 500 thousand of people and expects to exceed 1.5 million in 2023.
Baubap claims that in 2022 it grew 7x its revenue and portfolio volume and that with the new debt, it will seek to grow 5x and reach the equivalent of half a million dollars in loans, counting from its founding in 2019.
Main image: Adobe Stock
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