In Latin America, ~250 million people don’t have access to financial services. Most lack a documented history of payment behavior. And many are saddled by past-due debt to predatory lenders. In Chile, 50% of people have past due debt. In Mexico, it’s more like 60%.
Often they don’t know how much they owe. Sometimes they simply don’t realize they have debt and it’s way past due. So Destacame built a free online platform that’s helped 2.5 million people monitor and improve their financial health.
The platform provides a free credit report and a step-by-step program to help with budgeting for the future, preparing for shocks and long term financial planning. With it, people can create repayment plans, plan for unexpected financial shocks, and take more control of their financial well-being. For low-middle income people, simply knowing what they owe and understanding what they need to do, reduces a lot of unhealthy stress. And that’s in part why Destacame has rapid growth; their user base doubles every 18 months.
Destacame operates in Mexico and Chile. While Mexico has a credit score provider, Destacame needed to develop a proprietary credit scoring algorithm in Chile. With a grant from MetLife Foundation and support from Accion consultants, they built a tool that evaluates factors across financial, socio-demographic, and behavioural information.
Credit data is presented through a welcoming and friendly user interface that makes financial information easy to comprehend and digest. On the back end, the platform matches consumer credit information to appropriate credit products and solutions to repay their past due debt.
Banks typically avoid the low-middle income market segment because the costs and risks seem too high. But now Destacame provides them qualified prospects. This lowers origination costs, decreases risk, and helps banks see this markets segment as untapped opportunity.
Helping banks serve the unbanked is how Destacame creates economic opportunities for people who have been marginalized. And Destacame doesn’t plan to stop there. Through Q2, they plan to launch a debit card and start extending retail loans from their balance sheet. It’s all part of Destacame’s vision to broaden their impact by becoming “the bank to the unbanked”. And they plan to reach 6MM customers by 2021.
Destacame is a portfolio company of Fen Ventures, part of the Capria Network. Fen Ventures invests in early-stage tech companies in Chile which can scale impact throughout Latin America. Destacame’s plans to roll out more banking services to unbanked populations and bring economic opportunity to marginalized communities and reduce inequality is a great business model.
Fen Ventures is a part of the Capria Network, the leading global network of emerging market fund managers collaborating to deliver superior returns and scaled impact. Read more >