How Creditú revolutionises the way people access mortgages and SME loans in Latin America.
Nowadays, access to finance in Latam is harder than ever before, especially mortgages. Latam is one of the regions with the lowest penetration in mortgage loans and historically people get three times less loans than people in developed countries. Banks are simply not interested enough in mortgage loans due to low returns on equity and high acquisition costs. Today, with rates going steadily up because of inflation and the reduction in payment terms offered by banks, unless you are a class A client, the dream of homeownership has turned into a nightmare.
In this environment, quick adapting fintechs, like Creditú, are taking huge advantage over traditional banking. During this fintech’s first 2 years, Creditú grew 20% monthly with a unique solution for digital mortgages, focused on underserved customers, providing them with better and faster access to finance. In 2020 they broke into the Chilean capital market with the placement of the first mortgage-backed securitized bond for a Fintech in the region, for a total of US$20m; achieving the confidence of local institutional investors amid the economic and health situation in the country, brought on by the COVID-19 pandemic.
Aside from digital mortgages, Creditú delivers as an SME debt originator. More than $450 million USD have been generated in loans between Chile and Peru, for both lines of business.
Today, they are expanding regionally into Brazil and Mexico, pursuing a $600 billion USD market opportunity for loan origination across the region. CEO David Muñoz said, “We see a huge need for financial inclusion for middle-to-low-income families and SMEs all across the region and we plan to completely launch our products in all four countries by 2023.”
The agility which Creditú operates has revolutionised the market. “Whereas with a bank the process can take over three months, at Creditú a person can apply for a loan on Monday and can sign the sales contract on Friday”, said Muñoz. This is because of Creditú’s digital product, which offers a quicker and better experience for the client, feeding also their intelligent and adaptive underwriting risk model, based on advanced analytics techniques. By using this methodology, Creditú provides a reliable self-evaluation in seconds, using more than fifteen external sources of information, saving time and paperwork for both customers and partners such as real estate developers and brokers.
The company has also innovated in the financial industry creating an alternative fixed income asset for institutional investors and capital markets through tailor-made loan generation, specialised alternative debt funds and a warehouse plus securitization model. Muñoz explained, “We currently originate and sell loans to financial institutions and are transitioning towards a warehousing and securitization model to capital markets thanks to this technology. By 2026 we expect an origination of about $1.5 billion USD per year”
“There are so many reasons to believe in Creditú, such as our financial results, our fully digital customer experience, our high growth potential market as well as our regionally experienced and committed team, and our funding innovation. But most importantly, we are here to change lives by democratising access to financing and reinventing customer experience”
“In our team we align our goals with a huge focus on ESG growth in the region. From here, we target reducing gender gaps and discrimination within the traditional financial system. Last year, for example, 46% of our mortgage loans were granted to women, while the non-banking industry was at 36%. Also adding to this, 15% of our loans were given to foreigners”.
Founded in 2017, Fintech Creditú combines financial innovation with technological innovation to democratise access to financing and to reinvent the customer experience through an easy, fast and inclusive process. It has granted 3,000 mortgage loans and 800 SME loans in Chile, Peru, Mexico and Brazil for more than USD 450 million.
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