Have a good credit history It is vital for those seeking support from the bank to meet their short and long-term goals. With the aim of being a support for those who need to build it, Mariano Sanz and Alexander Schachter founded Kiwi Financialan online lending company that reports payment behavior to major credit bureaus to build the score.
“We are dedicated to helping Latinos living in the United States build their credit history and access microloans,” Sanz explained to elDinerospecifying that this is an underserved segment of the population, who live, for the most part, “day to day, with little savings and without data in the credit report.”
Its founders, with extensive experience in investment funds, relied on technology to offer a fast and effective solution for Latinos. Currently, they have more than 40,000 clients and operate in Florida and Puerto Rico. They founded the company in late 2020 and began operations in early 2021.
Their proposal seeks to digitize the operations of the well-known pawn shops, but with the advantage that it does contribute to building credit. To do this, they have a non-depository financial entity license in the states where they operate.
“We started in Puerto Rico because the credit reporting operating system already has a lot of weight for the entire population,” he said, highlighting that they have plans to expand to the Dominican market. However, the country presents “high unbanking rates for the business model.”
Kiwi Financial, which has Advent Morro, Morro Ventures, Altio Capital and Independent Capital as investment partners, has the goal of reaching a portfolio of 500,000 clients in the next five years, mainly in the United States. “We have all the infrastructure, now it’s a matter of continuing.”
Credit
According to Sanz, it is difficult for those who live “day to day” to turn to a bank to obtain a small loan in cases of unforeseen events, since, in some cases, banks are not interested in granting financing to those without a credit history. .
As a company, they analyzed this phenomenon and identified an opportunity. “There is a giant space that is not being attended to, and the only solution available to these people is to turn to a pawn shop,” where loans are made using the title of a vehicle, for example. These companies typically charge annualized rates of more than 300% in the United States.
“We come to attack that market, offering an easy way to the consumer without imposing collateral, even if they do not have a good credit history. We give you a loan using alternatives such as transactions from your bank account,” said the Kiwi co-founder.
When taking out a loan, whose amounts range between US$150 and US$1,000, the company reports the payments to the credit bureau, thus beginning to build the history. “The person who has no credit or has affected credit can sometimes see an increase of almost 80 points.”
These reports translate into better opportunities to obtain a mortgage, a vehicle loan, among others. “It opens up very big financial opportunities for the future.”
2024-03-02 13:01:19
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