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(Reuters) – Mexican financial services startup Klar has received a $100 million debt facility from investment firm Victory Park Capital, it announced on Tuesday, meant to expand the company’s loan book in a country where few residents have access to credit.
“This will let us provide better offers to our users, whether that’s larger credit lines or reduced interest rates,” CEO Stefan Moller said in an interview ahead of the announcement.
Klar, which currently provides payment services, investment accounts and loans to some 2.4 million clients, is looking to expand its user base with the funds, Moller said.
Mexico “is a really green market,” he said, highlighting that some 90% of Mexicans lack a credit card and 50% lack a bank account.
The executive explained that Klar currently offers credit lines ranging from 1,000 pesos ($58.67) to 30,000 pesos ($1,760.24), but is looking to “experiment” with loans up to 40,000 pesos.
“Every three months we re-evaluate the size of the (credit) line,” Moller said. “But we want to look at speeding that up, lowering it from every three months to every month.”
He said Klar was still determining the percentage of accounts which could see fast-tracked credit-line expansions, though he declined to give the firm’s average loan target and estimated number of clients through the end of the year.
A number of fintechs offering similar services have cropped up in Mexico in recent years, challenging the vanguard of traditional banks which have struggled with client discontent.
“This market hasn’t been tended to,” Moller said. “We’re still in a market where credit penetration and consumer credit penetration is much lower than it should be compared to economic development indicators.”
($1 = 17.0431 Mexican pesos)
