Beyond Payday Loans: More Startups and VCs Bank On Subprime Lending Alternatives

Latin America has become a hot market for startup innovation in the consumer lending category. Their vision is to turn a negative connotation into one that not only helps short-term borrowers, but builds their credit and provides financial education.

For instance, in recent months we have been able to see different investment rounds in Latin American lending platforms

• Mexico City-based Graviti earlier this month raised $2.5 million in a seed round led by Active Capital to develop a buy now, pay later concept aimed at millions of low-income, unbanked families in Latin America for whom purchasing home appliances are difficult.
• Baubap, a mobile lending platform also based in Mexico, in March closed on a $3 million growth round from Mexican financial services firm Grupo Alfin for its proprietary technology aimed at boosting financial inclusion and education.
• Last November, Monashees and ONEVC led a $5 million seed round in Brazilian Fintech startup Facio, which is developing a financial education platform that not only offers free lectures and courses, but also salary-advance services.