Mexican fintech Klar obtains a credit line of US$ 100 million to boost loans

2023-08-16 03:54:35

Mexican financial services startup Klar has received a $100 million credit line from investment firm Victory Park Capital, it announced Tuesday, with the goal of expanding the company’s loan portfolio in a country where few residents have access to credit.

“This will allow us to provide better offers to our users, whether it be larger credit lines or reduced interest rates,” Chief Executive Stefan Moller said in an interview ahead of the announcement.

Klar, which currently offers payment services, investment accounts and loans to some 2.4 million clients, aims to expand its user base with the funds, Moller said.

Mexico “is a really green market,” he said, noting that about 90% of Mexicans do not have a credit card and 50% do not have a bank account.

The executive explained that Klar currently offers lines of credit ranging from 1,000 pesos (US$58.67) to 30,000 pesos (US$1,760.24), but is looking to “experiment” with loans of up to 40,000 pesos.

“Every three months we reassess the size of the (credit) line,” Moller said. “But we want to see how to speed that up, bring it down from every three months to every month.”

He said Klar was still determining the percentage of accounts that could see accelerated credit line expansions, though he declined to give the company’s average lending target and estimated number of clients through the end of the year.

Several fintechs Banks offering similar services have sprung up in Mexico in recent years, challenging the vanguard of traditional banks that have battled customer discontent.

“This market has not been served,” Moller said. “We’re still in a market where credit penetration and consumer credit penetration is much lower than it should be compared to indicators of economic development.”