(Reuters) – Mexican financial services startup Klar has secured a $100 million debt facility from Victory Park Capital, an investment firm. The funding aims to expand Klar’s loan book in Mexico, where a significant portion of the population does not have access to credit.
Klar’s CEO, Stefan Moller, stated in an interview prior to the announcement that this financing will enable the company to offer better terms and conditions to its users, such as larger credit lines and reduced interest rates.
The company, which currently provides payment services, investment accounts, and loans to approximately 2.4 million clients, plans to use the funds to expand its user base.
Moller emphasized that the Mexican market is relatively untapped, with about 90% of Mexicans lacking a credit card and 50% without a bank account.
According to Moller, Klar currently offers credit lines ranging from 1,000 pesos ($58.67) to 30,000 pesos ($1,760.24), but the company intends to “experiment” with loans up to 40,000 pesos.
“Every three months, we assess the size of the credit line,” Moller explained. “However, we aim to expedite this process, reducing it from every three months to every month.”
Although Moller did not disclose the average loan target or expected number of clients by the end of the year, he mentioned that Klar is contemplating fast-tracking credit-line expansions for a certain percentage of accounts.
In recent years, several fintech companies offering similar services have emerged in Mexico, posing a challenge to traditional banks, which have struggled with customer dissatisfaction.
“This market has been neglected,” Moller noted. “We are still in a situation where credit penetration and consumer credit penetration lag behind economic development indicators.”
($1 = 17.0431 Mexican pesos)
(Reporting by Kylie Madry; Editing by Marguerita Choy)
Credit: The Star : Tech Feed
