Contxto – While Konfío recently partnered with Facebook, not to mention Kueski’s latest round, there’s a lot to talk about when it comes to Mexican microloan startups. Especially regarding Konfío, this has been an eventful week for the company.
This time around, it has opened a US$100 million secured credit facility from Goldman Sachs. Loans will allow the startup to provide even bigger loans to SMEs in Mexico.
“We came across Goldman at several Latin America fintech events, and we started conversations,” said Konfío’s CEO David Arana. “I think they’re the right partners to help us continue to make an impact.”
Additionally, the startup extended another existing credit line with Victory Park Capital (VPC) worth US$150 million.
Goldman Sachs credit line
With Goldman Sachs, the financial transaction was led by its Structured Finance, Investing and Lending team (SFIL). Specifically, this unit provides financing to clients all around the world.
“This initiative is part of a continuous effort to bring to Latin America what Goldman Sachs is already doing in other regions of the world,” said Ram Sundaram SFIL’s manager worldwide on a press release.
Extended loan from Victory Park Capital
In 2018, Konfío received a loan from Victory Park together with International Finance Corporation (IFC). This accounted for two credit lines worth US$25 million. Following this recent new, VPC has also decided to expand the credit to US$150 million.
“We are delighted to continue working with Konfío to improve access to financing by leveraging the digital transformation of the products of credit and helping the company increase its capacity to support local businesses,” said VPC’s partner Gordon Watson.
Thanks to these credit lines, Konfío just became one of Mexico’s most important credit companies. Moving forward, this investment will enable it to provide US$250 million in loans over the next 12 months. Surely, SME owners around the country are glad to hear this!
According to Konfío’s Report on Growth and Credit of SMEs, the biggest issues Mexican SME owners face is the lack of access to credit paired with inadequate financial services. Oftentimes, SMEs also have to wait for months to receive loan approval.
Determined to remedy these socioeconomic issues, Konfío has proved to be an important and successful tool for the national economy.
“Our data shows that our loans have been an effective growth enabler,” said Arana. “By the sixth month after receiving a Konfío loan, companies have experienced an average increase of 28 percent in their monthly sales over the previous year.”
Leveraging the latest technology, the platform rapidly analyzes customers’ credit behavior while collecting other data. This way, Konfío can make loans disbursements within 24 hours as well as offer interest rates at half the cost than traditional banks. Average loans are about US$20,000.