Contxto – Another fintech has been recently fueled to serve up more loans. This week, Mexican ePesos stated it closed a debt-financing round for US$21 million through Accial Capital. In addition, the startup announced the launch of “ePesos+”. This new service will tender to Mexico’s employed, but unbanked population.
There are lending fintechs that tender to individuals. And there are lending fintechs that tender to businesses. ePesos takes the middle ground between these segments because it helps companies roll out a credit line for their employees.
A worker essentially gets an advance on their salary through ePesos and then returns the loan to ePesos once payday comes around.
The fintech had previously raised US$6 million in equity capital through Santander Innoventures.
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ePesos versus shady lending
For the startup’s Founder and CEO, Oscar Robles, times are getting tough for employees and ePesos has a role to play in providing some level of relief.
“Only 15 percent of workers have access to formal credit, forcing many to resort to pawn shops or informal lenders,” says Robles.
“With ePesos+ the employees will be able to advance up to three months of their net salary with a service cost of up to 38 percent per year, which they will be able to repay within a period of up to 12 months.”
Rightly so, the Covid-induced crisis in Mexico is leaving many employees in a cash crunch.
Consequently, the demand for loans is rising. But if formal institutions close the door on them, many do rely on pawn shops and loan sharks to make ends meet. Although what’s perhaps worse is many have even become victims of fraud and extortion after forking over personal information such as their address and banking information.
In that sense lending products from platforms like ePesos represent a healthier alternative.
However, one of the biggest challenges to overcome is raising awareness of how employees’ financial troubles can spill over into the workplace. Put simply, leadership must overcome the “that’s not my problem” mentality to offer solutions and thus boost employee productivity.
Once that’s achieved it’s easier to orient them towards partnering with these startups.
Related articles: Tech and startups from Mexico!
-ML
