Imagine serving unsecured consumer loans to a population that has no credit file and no banking activity whatsoever. This population primarily uses cash and operates outside of the traditional financial system. Is it even possible to serve this population with short-term loans profitably?
My next guest on the Fintech One-on-One podcast is Roberto Salcedo, the CEO and Co-Founder of Baubap. Roberto and his team have done exactly that, building the technology and the underwriting models themselves to serve Mexico with small dollar loans. How he has been to do that makes for a fascinating story.
In this podcast you will learn:
- How he was able to leverage his knowledge as a banker to start Baubap.
- Why Mexico has lagged the rest of Latin America in adoption of financial services.
- Why the cash economy in Mexico makes it harder for banks.
- Baubap's core lending product and how quickly it is delivered.
- How they created their hypothesis for their unique approach to underwriting.
- The types of data they feed into their underwriting algorithms.
- How they started using AI in their initial models.
- Why they created all the fraud, identity verification and KYC features themselves.
- How they have been able to improve their approval rates over time.
- Some of the signals they use to indicate creditworthiness.
- The typical borrowers they are working with.
- Their lucrative referral program.
- How they are finding their borrowers.
- Their track record of profitability.
- How they were able to close a $120m debt facility from a US investor.
- Roberto's expansion plans for Baubap.
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