The future looks bright for Baubap and its financial inclusion services | Photo: Baubap.
Baubap, the renowned Multiple Purpose Financial Company (Sofom) from Mexico, has recently unveiled its short and medium-term growth vision in the financial sector. Since November 2022, Baubap has been working with a substantial financing line amounting to USD $30 million. Their primary goal is ambitious and transparent: they aim to quadruple their user base by the end of 2023.
The goal set for the following year is centered on expanding their services to a staggering 6 million users. This translates to granting loans amounting to a total of MXN $12,000 million. However, Baubap’s plans continue beyond there. The firm, which has made its mark in the personal credit realm, is acquiring a license that will authorize it to launch savings products for its clientele by 2025.
Baubap’s CEO, Roberto Salcedo, states that the core strategy will focus on enhancing their digital operation. This suggests a shift towards modernization and efficiency, likely in response to the current market trends that favor digitalization.
Baubap is more than just ambition and vision. The statistics from Sofom speak volumes about their strength and reliability. In the recent three years, they have shown a recovery rate of over 90% of the loans they’ve granted. Additionally, their delinquency rate has consistently remained below 10%. In any context, these figures indicate efficient and trustworthy management.
What stands out, particularly about Baubap’s clientele, is their profile. Nearly 40% of them are accessing formal credit for the first time through this Sofom. Salcedo emphasizes that before discovering the services, many of these users would turn to less conventional financing sources. Whether borrowing from family and friends or resorting to informal networks, these individuals had yet to engage with the traditional financial system.
Baubap’s proposition is more than just a simple credit offer. It represents an opportunity for those who, for various reasons, had remained on the sidelines of formal finance. By offering financial solutions to those previously without access, Baubap is promoting broader financial inclusion.
Notably, the fintech sector has gained significant relevance in recent years within Latin America. According to a study published by Finnovista in collaboration with the Inter-American Development Bank (IDB) in 2021, LatAm and the Caribbean already had 2,482 financial technology companies, representing 23% of all global fintechs. Specifically, Brazil and Mexico have been the leading proponents of the sector, a trend that has been on the rise in recent years.
