Small Business Micro-Lending in Mexico Gets a Boost Jonathan Shieber - TechCrunch
go to original October 9, 2017

 

Micro-lending and small business financing are a critical component of economic growth in around the world, and the need for access to low-cost capital is especially important in developing countries.

The Catch-22 is that these countries are also the ones where the lending markets are the least developed and where most financial institutions are reluctant to lend money to people who don’t have any credit history (what the industry calls “thin-file” customers).

The problem is especially acute in Mexico, where only 39% of the population has a bank account and 75 million people still have no access to the kind of financial services and lending support that they would need to start micro- and small- businesses.

Since banks are both overwhelmed by the demand and reluctant to meet it, a number of startups have launched services into the market to bring tech solutions to an industry that hasn’t been willing to change.

That’s the thinking behind Konfio, a Mexican startup that’s raised $10 million in new funding led by the International Finance Corp. (the investment arm of the development-focused World Bank) and previous investors including: QED Investors, Kaszek Ventures, Accion Frontier Inclusion Fund, Accion Venture Lab, and Jaguar Ventures.

Konfio is the latest company to tackle Mexico’s lending problem, but it’s by no means the only one. Kueski and Kubo.financerio have both raised capital from venture investors to take on Mexico’s debt dilemma.

In all, these early stage companies have raised roughly $29 million to support Mexico’s emerging technology-based lending market.

Read the rest at TechCrunch

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